Spotify to cut 6% of its global workforce

Music streaming service company Spotify announced on Monday that it will lay off about 6% of its global workforce, impacting some 600 employees.

"In hindsight, I was too ambitious in investing ahead of our revenue growth. And for this reason, today, we are reducing our employee base by about 6% across the company," Spotify co-founder and CEO Daniel Ek said in a letter to its employees.

"I take full accountability for the moves that got us here today," he added.

The layoffs make Spotify, which, according to its latest financial report, has 9,808 full-time employees, the latest tech company to cut its workforce.

Ek said the company still spent far too much time syncing on slightly different strategies, which slowed it down. "And in a challenging economic environment, efficiency takes on greater importance," he said.

According to Ek, the company's current trajectory was unsustainable over the long run. In 2022, the growth of Spotify's operating expenses outpaced its revenue growth by two folds. "Over the last few months we've made a considerable effort to rein in costs, but it simply hasn't been enough," he said.

Over the past year, Spotify shares have dropped by 50%.

Last week, Microsoft announced that it was laying off 10,000 people, and Google's parent company Alphabet said it would cut 12,000 jobs. Amazon, Meta, Salesforce, and many other companies have also announced similar layoffs in recent weeks.