Spotify Plans to Let Go More Employees This Week

Swedish music-streaming behemoth, Spotify Technology, is likely to announce layoffs as soon as this week, joining the industry-wide carnage that has already claimed thousands of jobs at Google, Apple, Microsoft, and Amazon.

Unnamed sources claim that it needs to be clarified how many Spotify employees are being considered.

Spotify let 38 people go in October from its Gimlet Media and Parcast podcast production facilities, according to Al Jazeera.

Spotify did not immediately react to a request for comment after its stock dropped 66% in 2022.

Why Will Spotify Employees Lose Their Jobs?

CEO Daniel Ek informed employees last June that Spotify would slow its hiring growth by 25% and "be a bit more prudent with the absolute level of new hires over the next few quarters."

At the investor day in the same month, CFO Paul Vogel cited "increasing uncertainty regarding the global economy" at Spotify's investor day in June as a reason for "evaluating [Spotify's] headcount growth in the near term."

There were roughly 9,800 Spotify employees at the end of the third quarter, and the audio streaming company earned €3.04 billion in sales and gained 195 million paying members, said The Hollywood Reporter.

Though the recession has not had a substantial impact, Ek did say that Spotify will be "more selective" in its "overall spending."

Spotify's quarterly profits report for the fourth quarter will be released on January 31 before the market opens.

Why Did Tech Giants Cut Jobs?

Following the over 18,000 layoffs at Meta and Twitter at last year's end, Google parent Alphabet, Microsoft, and Amazon have let go of 40,000 workers combined in recent weeks.

Many other smaller IT companies, like UK-based cybersecurity firm Sophos and cryptocurrency players like Coinbase, have also announced layoffs of up to 20 percent of their employees.

There have reportedly been more than 55,000 layoffs in the IT sector worldwide this year, and while last year's labor market was exceptionally robust, the technology sector was an exception.

After engaging in a big hiring binge during the first two years of the epidemic, industry titans such as Amazon and Meta changed course by 2022.

According to Layoffs.fyi, a website documenting tech layoff, since March 2020, there were at least 154,000 layoffs from more than 1,000 internet companies last year.

More than 26,000 layoffs have been documented so far in 2023, according to the website's tallies, which are probably an undercount, per USA Today.

"The number of actual layoffs is going to be much higher than what's on the site just because most layoffs don't get reported," Layoffs.fyi creator Roger Lee told USA TODAY. "Unfortunately, I don't see the layoffs going away anytime soon."

Although sectors such as technology and the media have experienced significant layoffs, the job market has remained strong.

The unemployment rate in the United States hit a new 50-year low in December, at 3.5%, after the economy added 4.5 million jobs last year.

"Across the economy, this is not a problem that we're seeing," said Rucha Vankudre, a senior economist at labor markets analytics firm Lightcast, stating that it looks pretty niche for the tech industry at the moment.

This article is owned by Latin Post.

Written by: Bert Hoover

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