Music streaming service Spotify is to reduce its workforce by 6%, following tech giants like Amazon, Google and Microsoft which all announced job cuts recently.
“Change is the only constant,” said Daniel Elk, Spotify's chief executive officer, in his open letter to Spotify employees.
“Today, we are reducing our employee base by about 6% across the company,” Elk added, stating his focus was on “the need to become more efficient.”
“In 2022, the growth of Spotify’s OPEX (operating expense) outpaced our revenue growth by 2 times,” the Swedish billionaire said.
Spotify, like many tech companies, was hugely boosted by the pandemic when its workforce grew by 50% between 2019 and 2021.
Spotify employed around 6,600 employees in 2021, with nearly half (3,175) working in research and development, the company’s 2022 full-year report revealed.
The music service also announced that Dawn Ostroff, chief content officer at Spotify, would be leaving.
Ostroff was one of Spotify’s highest-paid executives, earning a base salary of US$1mln.
“I hoped to sustain the strong tailwinds from the pandemic,” Elk revealed “in hindsight, I was too ambitious in investing ahead of our revenue growth.”
Prior to the pandemic Spotify’s shares sold for close to €110, during the lockdown its share price rose by 160% to €295.
The Swedish company’s share price is now €95.94, having tumbled 67% since its pandemic peaks.