Spotify will cut its workforce 6%, the streaming audio company said Monday, the latest technology heavyweight to lay off workers and tighten its belt.
Based on the number of workers Spotify reported at the end of 2021, a 6% reduction would mean cutting roughly 400 positions.
“Like many other leaders, I hoped to sustain the strong tailwinds from the pandemic and believed that our broad global business and lower risk to the impact of a slowdown in ads would insulate us,” CEO Daniel Ek said in a note to workers that Spotify published on its news blog. “In hindsight, I was too ambitious in investing ahead of our revenue growth. … I take full accountability for the moves that got us here today.”
During the periods of social distancing, people’s usage of Spotify tended to soften, as they stopped listening to music on the go when they were stuck at home. But the company, which is the biggest music streaming service of its kind, has continued its march of growth: It has set the expectation that, when it reports its latest results next week, it eclipsed 200 million subscribers at the end of the last year, for 479 million total listeners.
Spotify’s layoffs make it the latest company in tech — and other industries — to be cutting staff. Twitter, Microsoft, Amazon, Meta and Google also have let go thousands of workers in recent months. Like Spotify, many companies have pointed to overheated hiring during intense periods of pandemic demand; others have been hampered by deflating advertising business. Taken together, they paint a picture of the corporate world bracing for a broader global economic downturn.
In addition to the layoffs, Ek noted Tuesday that Spotify will reorganize some of its top leadership.
Gustav Söderström has was named chief product officer, after previously serving as head of research and development; Alex Norström was promoted to chief business officer, after he previous played that role, focused on the company’s “freemium” business model, which refers to its combination of free, ad-supported listening and paid subscriptions.
Together, Söderström and Norström will serve now as co-presidents, Ek said, “effectively helping me run the company day-to-day.”
Dawn Ostroff, who was Spotify’s chief content and advertising business officer, will be leaving the company. Norström will take on her responsibilities for content, advertising and licensing. To help with the transition, Ostroff will stay on as a senior adviser in the short term.