Spotify said Monday it plans to cut 6% of its workforce and take up to $50 million in related charges. Adding to massive layoffs in the tech sector to prepare for a possible recession.
The tech industry is facing a. Slowdown in demand after two years of pandemic-driven growth during which it hired . It has shed thousands of jobs at companies ranging from Meta to Microsoft.
“Over the past few months we’ve made considerable efforts to cut costs, but it wasn’t enough. Chief Executive Daniel Eck announced in a blog post about 600 job cuts. Spotify
“I was very ambitious in investing ahead of our revenue growth,” he added, echoing a sentiment echoed by . Other tech executives in recent months.
Spotify’s operating expenses grew at twice. The pace of its revenue last year as the audio-streaming. Company poured money into its podcast business. Which is more attractive to advertisers due to higher engagement levels.
At the same time, businesses have scaled back ad spending on the platform, mirroring a trend seen at . Meta and Google parent Alphabet. As fast interest rate hikes and the Russia-Ukraine war put pressure on the economy. Spotify
The company, whose shares rose more . Than 3% in premarket trading, is now restructuring itself to cut costs. And adjust to a deteriorating economic picture.
It said Don Ostroff, head of content and advertising, is leaving after more than four years at the company. Ostroff helped shape Spotify podcast business and . Steered it through the backlash surrounding Joe . Rogan’s show accused of spreading misinformation about Covid-19.
The company said it is hiring freemium business head . Alex Norström and research and development boss Gustav Söderström as vice presidents.
Spotify had about 9,800 full-time employees as of September 30.
Correction (January 23, 2023, 9:15 p.m. ET): A previous version of this article misspelled the last name of Spotify’s CEO. He is Daniel Eck, not Elk.