Music streaming app Spotify has joined the list of tech companies laying off staff in their numbers. Announced by its CEO, Daniel Ek, the company will let go of 6% of its workforce (~500 people) as part of Ek’s efforts in restructuring the company for better efficiency.
“Speed is the most defensible strategy a business can have. But speed alone is not enough. We must also operate with efficiency,” Ek said in a memo. He also blamed the decision to fire some staff on the growth of Spotify’s operating expenses in 2022 which was two times more than the companies revenue growth. “That would have been unsustainable long-term in any climate, but with a challenging macro environment, it would be even more difficult to close the gap,” Ek added.
Spotify will give laid off staff 5 months of severance pay, unused vacation monies, continued healthcare during their severance period, immigration support and career support to better transition into the labour market.
This is one more big tech company to fire this many people in 2023 alone and there are indications that the layoffs will not stop anytime soon. Concerns have also risen on how much unemployment these tech layoffs have caused and their impact on economies of the world.
