Spotify is the latest tech company to announce a wave of layoffs as recession whispers loom.
On Monday, the streamer confirmed that it would eliminate approximately 600 people within its global workforce, which accounts for 6% of its total workers. The Sweden-based company informed staff via an internal memo sent by CEO Daniel Ek. After receiving the email, staffers were left to anxiously await “one-on-one” conversations with their managers informing them of their fate. Spotify Chief Content Officer Dawn Ostrof also revealed her departure from the company.
The move arrives as Spotify works to cut costs in certain areas. This revelation is disheartening, especially considering that the company inked a three-year deal in 2020 with controversial podcast Joe Rogan worth an estimated $200 million. Additionally, that same year, Spotify acquired The Ringer, a podcast network and website covering pop culture and sports, for an estimated $250 million.
“In hindsight, I was too ambitious in investing ahead of our revenue growth,” Ek wrote, though he didn’t expound on any specific investments.
Sadly, this rash of layoffs is not exclusive to the music platform. Most of the tech sector is being forced to cut down its workforce after mass hiring to meet increased growth during the pandemic. Days ago, employees with Google were left blindsided by the terminations of both newly promoted and tenured workers. On January 18th, Microsoft announced 10,000 staffers would be axed.
Spotify is set to pay up to $65.5 million in severance to affected employees.