Spotify to shed 6% of its workforce…

Music streaming company, Spotify – a company that has never posted a full-year net profit – has become the latest casualty in the tech sector. This week it announced it would be cutting 6% of its workforce – some 600 employees – many of which are expected to be in the US. Spotify’s severance-related pay (averaging around five months’ pay per employee), is expected to cost the company around €35m (£30m), but in a letter to staff, CEO Daniel Ek admitted he had been too quick in growing the company’s headcount. The memo said: “We’ve made the difficult but necessary decision to reduce our number of employees…In hindsight, I was too ambitious investing ahead of our revenue growth. And for this reason, today, we are reducing our employee base by about 6% across the company. I take full accountability for the moves that got us here today.” Ek added that his focus was on ensuring “every employee is treated fairly as they depart.” All staff will be able to access outplacement services for two months, and healthcare will continue to be provided during employees’ severance period. Spotify had about 9,800 employees at the end of its third quarter in 2022. The company reported a net loss of €166 million ($181 million) in the third quarter, compared with a €2 million profit in the same period of 2021, with sales increasing 21% to €3.04 billion. The company employs 5,400 people in the U.S. and 1,900 in Sweden.