Spotify announced on Monday, January 23, that it will cut 6% of its workforce to reduce costs, joining tech companies like Amazon and Microsoft in reducing staff as the global economy slows.
In a letter to employees posted on the company’s website, CEO Daniel Ek took full responsibility for the job cuts, which he called “difficult but necessary”. He said:
“Like many other leaders, I expected to sustain the strong tailwinds of the pandemic and believed that our large global businesses and lower risk of the impact of an advertising slowdown would insulate us. In hindsight, I was too ambitious to invest before our revenue growth.”
The Stockholm-based music streaming company had about 9,800 employees worldwide as of Sept. 30, according to an earnings report.
The company’s shares, which have nearly halved over the past 12 months, were up more than 4% in premarket New York. Spotify’s share price is up 24% since the start of the year, data from Refinitiv shows.
In recent months, major tech companies have quickly reversed a wave of hiring made during the pandemic to keep pace with increased demand from homes and businesses for services like online shopping and video conferencing.
The same companies have recently made deep cuts to their workforces as inflation weighs on consumer spending and rising interest rates squeeze funding. Demand for digital services during the pandemic has also declined as people return to their offline lives.
In the past three months, Amazon, Google, Microsoft and Facebook, Meta, have announced plans to cut more than 50,000 employees from their collective ranks.
This article is a translation of the writing by Hanna Ziady to the website CNN Business.
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