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Stockholm (AFP) – Spotify, the world leader in audio platforms, announced that it will cut 6% of its workforce, that is, some 600 jobs, thus joining the wave of layoffs among technology giants.
This is the largest staff cut in the history of this Swedish company founded in 2006 in Stockholm and which reached more than 500 million subscribers.
“In hindsight, I have been too ambitious investing faster than our turnover growth,” company CEO and co-founder Daniel Ek, 39, said in an online message to employees.
“For this reason, we reduce our staff by around 6% in the entire group,” explained its director.
Spotify is listed on the New York Stock Exchange and at its open on Monday, shares rose 4.6% to $97.91.
“In the next few hours there will be individual interviews with the affected employees,” Ek explained.
Although Spotify has been occasionally profitable, the company used to post losses for several years, despite the lightning growth of its number of subscribers and the advantage that it gains on its competitors, such as Apple Music.
The company will publish its annual results on January 31.
“Non-viable”
“As you know, we’ve made a considerable effort in recent months to reduce our costs, but it just hasn’t been enough,” added Ek.
According to the Scandinavian billionaire, Spotify’s investments grew twice as fast as its revenue last year.
“In the long term it would be unfeasible in any context, but in a difficult environment at the macroeconomic level, it will be even more difficult to cover the hole,” he stressed.
In recent years, Spotify has also invested more than €1 billion in the podcast industry, in which it has become a world leader. But the benefits of this investment are still unknown, according to analysts.
Betting on this audio format also brought him controversy, such as when American star Joe Rogan was accused of spreading false news on his shows.
At the end of September, the platform had some 456 million subscribers. A part, 195 million, pay for the service. The group aspires to have one billion users by 2030.
Its annual turnover reached 9.6 billion euros in 2021 (10.4 billion dollars) – most of it coming from paying subscribers – and the number of employees tripled in five years to reach 9,800 at the end of September.
Spotify’s announcement follows a series of layoff plans announced by big tech groups in recent weeks.
After layoffs at Amazon, Meta and Microsoft, Google announced on Saturday that it will cut 12,000 jobs worldwide, that is, just over 6% of its workforce. On Wednesday, Microsoft announced that it would make 10,000 layoffs by April.
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