Music streaming giant Spotify is laying off 6 percent of its workforce, as part of a company-wide restructuring. In a message to employees, CEO Daniel Ek said that the company will provide 5 months of severance to employees on average, along with accrued and unused vacation time, healthcare during the severance period, immigration support, and career support. The number of people who will lose their jobs wasn’t provided, but the company employs around 9,800 people, according to its last earnings report.
In addition, chief content officer Dawn Ostroff is stepping down as part of the changes. Ostroff had been responsible for driving the company’s expansion into podcasting, which saw Spotify spend over a billion dollars on podcast networks, hosting services, and shows like The Joe Rogan Experience. Ek said that the company is “fundamentally changing how we operate at the top,” delegating its engineering and product work to the new chief product and chief business officers.
The restructuring is in line with what other tech companies have been doing in recent weeks. Microsoft, Amazon, Meta, and Google have all announced layoffs, due to a downturn in the economy and due to hiring sprees. Despite the layoffs, these companies still hired many more employees than they let go from 2020 to 2022. Spotify itself had 6,617 employees in 2021 and 9,800 a year later, prior to the layoffs.
This news comes as a surprise, as Spotify has been expanding rapidly over the past couple of years, particularly in the area of podcasting. However, the company’s growth and expansion have been hit by the economic downturn caused by the COVID-19 pandemic, forcing the company to make difficult decisions in order to sustain its operations. Spotify’s CEO has taken full accountability for the layoffs and restructuring, and the company will be providing support to affected employees in the form of severance and career support.
