Spotify plans to reduce workforce by 17 percent


(MENAFN) On Monday, music streaming company Spotify revealed plans to reduce its workforce by 17 percent, amounting to approximately 1,500 employees.

"Economic growth has slowed dramatically and capital has become more expensive," Chief Executive Officer Daniel Ek stated in a declaration. "I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance."

In the third quarter of 2023, Spotify witnessed a revenue increase to nearly €3.36 billion (USD 3.64 billion), marking a growth of 10.5 percent compared to approximately €3.04 billion in the corresponding period of the previous year, as indicated by the company's latest financial results statement.

The net income attributable to owners for this period amounted to €65 million, showcasing a robust recovery from the €166 million loss incurred in the third quarter of the previous year.

"Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives," Ek stated.

In January, Spotify made the decision to cut its workforce by 6 percent, translating to 600 employees. This was followed by an additional 2 percent reduction, affecting approximately 200 employees, in June.

Numerous technology companies have been grappling with financial challenges, leading to a trend of job cuts across the industry.

Since the last quarter of the previous year, a multitude of companies in the technology sector, including Uber, Reddit, Disney, 3M, Amazon, Yahoo, Affirm, Zoom, Dell, IBM, Microsoft, Salesforce, PayPal, as well as Google's parent company, Alphabet, have implemented significant layoffs, impacting thousands of workers.

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