Spotify employees were alerted this morning to the news that the company would be shedding its workforce to offset higher costs in 2022.
“To provide some insight as to why we are making this decision, in 2022 Spotify’s OPEX growth has more than doubled our revenue growth,” CEO Daniel Ek wrote in a letter detailing other organizational changes taking place. “That would not have been sustainable in any climate over the long term, but with a challenging macro environment it would be even harder to close the gap. As you know, we’ve made significant efforts to contain costs over the last few months, but it just wasn’t enough. So it’s clear that this is the right path for Spotify to take, but it doesn’t get any easier – especially when we consider the many contributions these colleagues have made.”
In the last three months, Amazon, Google, Microsoft, Salesforce and Meta have announced they are cutting employees from their respective ranks, affecting over 50,000 people. According to an Insider report, an average of 1,600 tech workers have been laid off every day so far in 2023.
CNN writes, “Spotify reported a loss of €228 million ($248 million) for its most recent fiscal quarter ended September 30, as operating expenses skyrocketed 65%, according to a company presentation to investors.”
Spotify is trending on Twitter right now, and reports of the layoffs continue to spread, especially with employees taking to the platform to announce their fate, as we’re oddly accustomed to doing already this year.
For end users, this latest round of layoffs is unlikely to impact their day-to-day listening experience. However, the general technology landscape is currently raising some questions about how sustainable current systems will cope with global economic imperatives.