Spotify latest tech company to lay off workers

Around 600 workers will be fired from the Swedish company.

Hannah Martens | January 24, 2023, 01:29 PM

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On Jan. 23, Spotify Technology announced that the company would undergo organisational changes, as about six per cent of its staff is to be laid off.

According to the BBC, the Swedish company had around 9,800 full-time employees in 2022.

"Difficult but necessary" decision

In a press release on Jan. 23, CEO Daniel Ek said that to bring Spotify's costs "more in line", they had to make the "difficult but necessary decision to reduce [their] number of employees."

The company planned to hold one-on-one conversations with employees affected by the layoffs.

Ek attributed the layoffs to Spotify's operating expenditure growing twice the speed of its revenue in 2022.

Despite its widespread use, the company has never recorded a full year net profit.

"In hindsight, I was too ambitious in investing ahead of our revenue growth," said Ek. "I take full accountability for the moves that got us here today."

According to Reuters and BBC, Spotify has heavily invested to fuel growth with expansions into new markets since its launch. More recently, the company has invested in its podcast business, as it was more attractive for advertisers due to higher engagement levels.

Another company on a long list

This latest news of layoffs by Spotify is just another one of the tech firms laying off thousands of their workers.

On Jan. 18, Microsoft announced that more than 10,000 employees would be laid off starting Jan. 19. It is unclear if the Microsoft Singapore office is affected.

On Jan. 20, Google's parent company, Alphabet Inc., said it would cut more than 12,000 jobs, according to Reuters.

In a staff memo, the job cuts were the product of "a different economic reality" and that it was the time to "sharpen our focus, reengineer our cost base and direct our talent and capital to our higher priorities."

Other tech companies that have laid off their workers include Amazon and Meta, said Reuters.

Late last year, Singapore staff at Twitter were laid off following Elon Musk's takeover of the social networking company.

Top photos from Unsplash and Pixabay.