Spotify has cut 17 percent of its workforce, totaling roughly 1,500 employees. It’s the music-streaming giant’s third round of layoffs in 2023.
Spotify CEO Daniel Ek placed the blame on a slower economy and rising interest rates. “In 2020 and 2021, we took advantage of the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing, and new verticals,” he wrote in a posting on Spotify’s corporate site. “These investments generally worked, contributing to Spotify’s increased output and the platform’s robust growth this past year. However, we now find ourselves in a very different environment.”
He added: “Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact. More people need to be focused on delivering for our key stakeholders—creators and consumers.”
If those themes sound familiar, it’s because Ek is echoing what other tech leaders said in the wake of massive tech-industry layoffs earlier this year. During the pandemic, as homebound consumers and all-remote businesses purchased all kinds of cloud-based apps and services, revenues for many tech companies (particularly those focused on the cloud) shot through the proverbial roof. But that situation couldn’t sustain, and fears of economic uncertainty led many executives to cut back on everything from headcount to new projects.
Some of those tech giants that unleashed massive layoffs in late 2022 and early 2023, including Meta and Salesforce, have begun hiring again, particularly in “hot” areas such as artificial intelligence (A.I.) and machine learning. But Spotify and other companies are still tweaking their headcounts and making other changes, especially if they see the need for a radical strategy adjustment.
Despite any lingering economic fears, the tech unemployment rate hit 2.1 percent in October, according to new U.S. Bureau of Labor Statistics (BLS) data analyzed by CompTIA. Even as the biggest names in tech adjust their respective headcounts, there’s still a generalized need for tech professionals with the right mix of skills and experience.
