Music streaming service Spotify has said it will cut around 600 jobs, becoming the latest big tech company to admit it expanded too fast during the coronavirus pandemic.
Its co-founder and CEO, Daniel Ek, told staff in a blog post that the platform was cutting its workforce by 6% after being “overambitious.”
“Like many other leaders, I hoped to withstand the strong tailwinds of the pandemic and believed that our vast global business and lower risk of the impact of an ad slowdown would insulate us,” he wrote. “In hindsight, I was too ambitious to invest before our revenue growth.”
Spotify’s operating expenses grew at twice the speed of its revenue last year, Ek wrote, as the Stockholm-based company invested heavily in its podcast business. The company makes money from its premium service, which accounts for around 85% of its revenue, with the rest coming from its ad-supported service.
“Over the past few months we have made a considerable effort to control costs, but it just hasn’t been enough,” Ek wrote.
Amazon, Microsoft, Facebook parent company Meta, Google owner Alphabet, and enterprise software company Salesforce have all announced major job cuts recently, citing an uncertain economic environment and over-expansion under Covid restrictions when there were a boom in demand for technology-related products and services.
Spotify has 456 million monthly users. Last year, the number 1 most streamed artist on the platform globally was Bad Bunny, followed by Taylor Swift, Drake, The Weeknd and BTS.
Ek told staff that Dawn Ostroff, the head of content and advertising, was leaving after more than four years with the company. Ostroff helped shape Spotify’s podcast business and guided it through the backlash surrounding the Joe Rogan show for interviewing guests who shared Covid-19 conspiracy theories.
