Spotify employees were alerted this morning to the news that the company would be slashing its workforce to offset higher costs in 2022.
“To offer some perspective on why we are making this decision, in 2022, the growth of Spotify’s OPEX outpaced our revenue growth by 2X,” CEO Daniel Ek wrote in a letter spelling out other organizational changes taking place. “That would have been unsustainable long-term in any climate, but with a challenging macro environment, it would be even more difficult to close the gap. As you are well aware, over the last few months we’ve made a considerable effort to rein-in costs, but it simply hasn’t been enough. So while it is clear this path is the right one for Spotify, it doesn’t make it any easier—especially as we think about the many contributions these colleagues have made.”
Over the past three months, Amazon, Google, Microsoft, Salesforce and Meta have all made announcements to cut employees from their respective ranks, with over 50,000 people affected. According to a report by Insider, an average 1,600 tech workers have been laid off every day of 2023 so far.
Writes CNN, “Spotify reported a loss of €228 million ($248 million) in its most recent financial quarter through September 30, as operating expenses shot up by 65%, according to a company presentation to investors.”
Spotify is currently trending on Twitter, with reports of the layoffs continuing to disseminate especially as employees take to the platform to announce their fates, as we’ve become oddly familiar with seeing this year already.
For end users, this latest round of layoffs will likely not affect their daily listening experience. However, the overall landscape of tech at the moment sheds some questions around how sustainable current systems in place will fare with global economic constraints.
This article was first published on Your EDM. Source: Spotify joins other tech giants, announces layoff of approximately 6% of its workforce