23 Jan (Reuters) – Spotify Technology SA (SPOT.N) said on Monday it plans to cut 6% of its workforce and will bear up to $50 million in related costs. Because of the possibility of recession.
The tech industry is facing a drop in demand after two years of pandemic-driven growth during aggressive hiring. It has cut thousands of jobs at companies from Meta Platforms (META.O) to Microsoft (MSFT.O).
In a blog post announcing the roughly 600 job cuts, CEO Daniel Elk said, “Over the past few months, we’ve made significant efforts to keep costs down, but it just wasn’t enough. .
“I was too ambitious to invest in earnings growth ahead of time,” he added, echoing sentiments expressed by other tech bosses in recent months.
Spotify’s operating expenses grew at twice the rate of last year’s revenue. This is because audio streaming companies have aggressively invested in the podcast business.
At the same time, as rapid rate hikes and the aftermath of the Russia-Ukrainian war put pressure on the economy, businesses have increased their ad spending on platforms, mirroring trends seen at Meta and Google parent Alphabet (GOOGL.O). refrained from
The company, whose share price rose 5.8% to $103.55, is currently restructuring to cut costs and adapt to the worsening economic conditions.
Head of content and advertising, Dawn Ostroff, said he was leaving the company after more than four years. Ostroff said she helped shape Spotify’s podcast business and allegedly spread misinformation about COVID-19.
The company said it will appoint Alex Norström, head of its freemium business, and Gustav Söderström, head of its research and development division, as co-presidents.
As of September 30, Spotify has approximately 9,800 full-time employees.
($1 = 0.9196 Euro)
Reported by Eva Mathews of Bangalore. Edited by Sherry Jacob-Phillips and Shailesh Kuber
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