Spotify will cut 6% of its staff | CNN Business

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CNN
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Spotify ( SPOT ) said Monday it will cut 6% of its global workforce to cut costs, joining tech companies such as Amazon ( AMZN ) and Microsoft ( MSFT ) in cutting headcount as the global economy slows down.

In a letter to employees posted on the company’s website, CEO Daniel Ek took full responsibility for the job cuts, which he called “difficult but necessary.”

“Like many other leaders, I hoped to ride out the strong tailwinds of the pandemic and believed that our broad global business and lower risk of the impact of an ad slowdown would insulate us. In retrospect, I was too ambitious at the time to invest ahead of our revenue growth,” he said.

The Stockholm-based music streaming business had about 9,800 employees worldwide as of September 30.

In recent months, major tech companies have quickly reversed a pandemic hiring spree that has seen them add thousands of workers to keep up with increased demand from households and businesses for services such as shopping online and video conferencing.

The same companies have recently made deep cuts to their workforces as inflation weighs on consumer spending and rising interest rates squeeze funding. Demand for digital services during the pandemic has also declined as people return to their offline lives.

Over the past three months, Amazon ( AMZN ) , Google ( GOOGL ) , Microsoft ( MSFT ) and Facebook ( FB ) parent Meta have all announced plans to cut more than 50,000 employees from their collective ranks.

The recent cuts, in most cases, represent a relatively small percentage of each company’s overall workforce, essentially wiping out the last year of earnings for some while leaving them with a huge workforce.

Spotify’s decision to cut about 590 jobs is part of a broader reorganization to improve efficiency and “accelerate decision-making,” according to Ek. As part of the changes, engineering and product work will be centralized. Chief content officer Dawn Ostroff had also decided to leave the company, Ek said.

– Clare Duffy contributed to this report.