Spotify cuts almost 1,600 jobs amid rising costs
Streaming giant Spotify is to cut almost 1,600 jobs, with the company pointing fingers at a slowing economy and higher borrowing costs.
Spotify billionaire founder and boss Daniel Ek revealed the company had decided to cut 17% of its workforce, the third and steepest round of redundancies of 2023.
Ek told employees they would receive a calendar invitation “within the next two hours from HR for a one-on-one conversation” if they were affected by the cuts, in a message to staff published on Spotify’s website on Monday.
2023 has been marked by cuts from big tech companies such as Meta, Microsoft and Amazon. Companies have made large-scale redundancies during the year after interest rates rose and investors focused on their ability to cut costs to protect profits.
Spotify – based in Stockholm – is a major player in the global tech industry and one of the few European companies that rival big US tech companies.
Yet as the global economy’s momentum has waned, it has held back from its previous heavy investment into podcasting.
Ek said Spotify had taken advantage of cheap borrowing during 2020 and 2021, when central bankers cut interest rates sharply in response to coronavirus pandemic lockdowns, but that “we now find ourselves in a very different environment”.
“Despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big,” he wrote.