Spotify shaking . So, here’s the scoop: Spotify, the music-streaming giant, is about to do some major staff cutting. Daniel Ek, the CEO, announced that they’re saying bye-bye to around 1,500 employees. Why? Well, they want to save some cash and switch up their game plan.
Why the Big Move?
According to Ek, the economy’s not in great shape, and money’s become more expensive for businesses. Spotify’s feeling the pinch too. Despite gaining tons of subscribers and growing like crazy, they’re still not making consistent money. So, they’re hitting the reset button to get back to their early days when they were a startup.
Ek mentioned they thought about doing smaller staff cuts over a couple of years, but they realized they needed a big move to match their financial goals with their spending. He’s being straight-up about it: a lot of awesome folks are going to be leaving Spotify.
They’re going to have one-on-one talks with the affected staff real soon, before tomorrow ends. To soften the blow, they’re giving an average of five months’ worth of pay as severance.
Spotify’s Past Cuts
This isn’t the first time Spotify’s had to slim down. Earlier in January, they said goodbye to over 500 employees. Then in June, another 200 got the boot, specifically from their podcast team. They’re not alone; big tech companies like Microsoft and Amazon have also cut jobs because the economy’s been sluggish.
The Background Story
During the pandemic, everyone wanted stuff online. Spotify and other big techs went on a hiring spree to keep up. But now, things have changed. Prices are going up, people are spending less, and it’s getting tough to find money for companies. So, they’re trimming their teams.
Spotify’s Profit Picture
Even though Spotify gained 6 million more subscribers than they thought they would from June to September, their profit was just €32 million ($34.8 million). Last year, they lost €228 million ($248 million) during the same time. Overall, they’ve got around 226 million subscribers.
What’s the Plan?
Ek’s saying they’ve got some work to do. They’ve got to be smarter about how they operate. Right now, too many people are doing support stuff rather than focusing on what matters: making things awesome for the people who create content and those who use Spotify.
He’s spinning this as a strategic move. They’re not stepping back; they’re changing direction. But this big cut means they’ll have to work in a new way. They’re promising to share more details about this shift soon.
So, that’s the lowdown: Spotify’s downsizing to get back on track and be more efficient. Tough for those losing their jobs, but they’re aiming to bounce back stronger.