Spotify Announces 6% Workforce Reduction, Citing Slowing U.S. Economy

Spotify, the popular music streaming service, announced Monday that it will lay off 6% of its workforce in an effort to reduce costs amid a slowing U.S. economy. The move follows similar job cuts from other big tech companies such as Amazon and Microsoft.

In a letter to employees posted on the company’s website, CEO Daniel Ek took full responsibility for the job cuts, which he called “difficult but necessary.” He noted that the company had hoped to sustain the strong tailwinds from the pandemic and believed that its broad global business and lower risk to the impact of a slowdown in ads would insulate it.

The job cuts come as the tech industry has seen a reversal of the hiring spree that surged during the pandemic as millions of Americans moved their lives online. In January alone, industry players have cut roughly 50,000 jobs.

Spotify had about 9,800 employees globally as of September 30, according to an earnings report. The company has not yet released details on how many jobs will be affected by the cuts, but said it will provide severance and other benefits to those who are laid off.

The job cuts are part of Spotify’s effort to reduce costs and streamline operations. CEO Daniel Ek said in a statement that the company needs to “sync on slightly different strategies, which slows us down.” He added that the job cuts are necessary for the company to remain competitive and continue to provide the best possible service to its customers.