What simply occurred? In a memo shared on Spotify’s web site, CEO Daniel Ek mentioned they’d determined to cut back headcount throughout the corporate by about 6%. Ek mentioned Spotify has made nice strides in making the corporate function quicker, however added that additionally they need to function effectively.
Spotify has grow to be the most recent tech firm to announce organizational modifications that result in vital layoffs.
Like many different corporations within the tech trade, Spotify has grown and invested closely throughout the pandemic. Last yr, Spotify’s working bills greater than doubled its income progress. As Ek factors out, this isn’t sustainable in any local weather in the long term, particularly within the present difficult macro surroundings.
In hindsight, Ek mentioned he was too formidable to speculate forward of income progress. “I take full accountability for the actions that acquired us right here immediately,” Eck mentioned.
All affected staff will obtain severance pay, with typical staff receiving roughly 5 months’ pay, relying on metrics comparable to tenure and native discover interval necessities. All accrued and unused trip time can even be paid, and departing staff will proceed to obtain medical insurance throughout their separation. In addition, all can be eligible for 2 months of reemployment providers to assist discover new work, whereas these whose immigration standing is related to their employment will obtain help from human assets and mobility groups.
A Spotify spokesperson informed the Wall Street Journal that the layoffs will have an effect on about 600 staff and aren’t department-specific.
Ek additionally introduced some management modifications. Most notably, chief content material and promoting officer Dawn Ostroff has determined to depart the corporate. Under her management, Spotify has grown its podcast content material 40-fold and greater than doubled its advertising-generated income.
Despite the layoffs, Ek mentioned he believes 2023 can be a yr stuffed with innovation not like something they’ve launched up to now few years. Perhaps Spotify HiFi will lastly make its long-awaited debut?
Image credit score: Thibault Penin, Eyesetix Studio