Spotify lays off 2% of its workforce as tech job losses continue

Spotify is the latest tech company to lay off staff as tech companies battle with the global economic slowdown. Spotify announced on Monday that it’s laying off roughly 200 employees, or about 2% of its-person workforce, as part of what the company describes as the effort to change how it handles its partnership with “leading podcasters from across the globe.”

The news comes just a few months when the music-streaming giant announced in January it planned to lay off 6% of its employees, or about 600 jobs, adding to 173 tech companies that have already laid off their employees as the sector prepares for a possible recession.

According to the Securities and Exchange Commission (SEC) filing, Spotify’s global workforce was 8,359 people in 2020, with 4,332 of those employees in the United States.

The cuts were announced by Spotify vice president Sahar Elhabashi in a memo addressed to the company’s employees. Elhabashi assured that those affected by the cuts will receive generous severance packages as part of the company’s support for them during this transition.

“We are expanding our partnership efforts with leading podcasters from across the globe with a tailored approach optimized for each show and creator. This fundamental pivot from a more uniform proposition will allow us to support the creator community better. However, doing so requires adapting; over the past few months, our senior leadership team has worked closely with HR to determine the optimal organization for this next chapter. As a result, we have made the difficult but necessary decision to make a strategic realignment of our group and reduce our global podcast vertical and other functions by approximately 200 people, or 2% of Spotify’s workforce,” Elhabashi said in a post on the company’s website.

Elhabashi further explained that this shift marks a fundamental change from a more uniform approach and aims to enhance support for the creator community.

Over the past three years, Spotify has made significant investments in expanding its podcast division. According to the SEC filing, the company allocated approximately $526 million (493 million euros) for four different podcast-related acquisitions since 2020.

In addition, Spotify has entered into notable sponsorship agreements with prominent personalities such as Meghan, the Duchess of Sussex, and online personality Joe Rogan. These partnerships have brought significant attention to the platform.

Spotify is not alone. Tech giants including Meta, Google’s Alphabet, and Nvidia have all taken measures to rein in spending. Other companies like Coinbase, Shopify, Netflix, and Twilio have also announced layoffs. In March, Facebook-parent company Meta announced it would cut 10,000 jobs, just four months after it let go of 11,000 employees, making the social giant the first Big Tech company to announce a second round of mass layoffs.

The global economic downturn that started in the second quarter of 2022 is beginning to have a major impact on tech companies. About 700 tech companies have let go of 197,985 workers, according to Layoffs.FYI, a site that has been tracking all tech layoffs using data compiled from public reports.

Spotify is one of the world’s most popular music streaming services, with over 356 million monthly active users, including 158 million premium subscribers. The music-streaming behemoth has seen explosive growth in revenue and customer base in recent years.

Spotify started in October 2008 in Stockholm, Sweden as a commercial music streaming service that provides restricted digital content from a range of record labels and artists. The company also provides a freemium service; basic features are free with advertisements or limitations.