Spotify, the Swedish music-streaming company, has announced that it will lay off 6% of its around 10,000 employees in order to increase efficiency.
“In hindsight, I was too ambitious in investing ahead of our revenue growth,” CEO Daniel Ek said on the company’s blog. “I take full accountability for the moves that got us here today,” Mr Ek added. Despite its prominence in the online music market, Spotify has never reported a full-year net profit.
It comes after Microsoft and Alphabet announced losses last week. Alphabet, which owns Google, announced 12,000 job cuts, while Microsoft announced up to 10,000 layoffs.
Dawn Ostroff, the chief content and advertising business officer at Spotify, will also leave as part of a larger reorganisation.
Spotify, which employed roughly 9,800 full-time employees last year, said it expects severance-related charges to cost at least €35 million (£30 million).
Since its inception, Spotify, which is traded on the New York Stock Exchange, has invested substantially to drive growth through expansions into new regions and, in later years, exclusive content such as podcasts. The corporation said in October that it would reduce recruiting for the remainder of the year and into 2023.
This statement by Spotify comes at a time when technology businesses are experiencing a dip following two years of pandemic-driven expansion in which they staffed extensively.
Hundreds of people, including some of the industry’s biggest stars, have been laid off in recent weeks.