Spotify plans to cut 6 per cent of its workforce as part of an overhaul to the business, becoming the latest technology group to lay off staff in an attempt to reverse a pandemic-induced hiring spree.
The music-streaming service estimated it would incur about €35mn-€45mn in severance-related charges to staff who will lose their jobs. Spotify reported having 6,617 employees at the end of the financial year 2021.
Alex Norström, chief freemium business officer, and Gustav Söderström, head of research and development, will become co-presidents as part of a shake-up at the top of the business.
Dawn Ostroff, chief content and advertising business officer, will leave the group, taking on an advisory role in the interim, Spotify said in a statement on Monday. Ostroff helped expand Spotify’s podcast content by 40 times, the company said.
The moves are part of efforts to drive more efficiency, control costs and accelerate decision-making, chief executive Daniel Ek told staff.
“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,” Ek said.
“In hindsight, I was too ambitious in investing ahead of our revenue growth,” he added.
Other tech groups to axe staff include Microsoft, which last week said it would cut 10,000 jobs, or 5 per cent of its workforce, by the end of March, in a push to lower costs.