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The
tech industry is facing a demand downturn after two years of
pandemic-powered growth during which it had hired aggressively.
That has led firms from Meta Platforms Inc to Microsoft Corp to
shed thousands of jobs.
"Over the last few months we've made a considerable effort to
rein in costs, but it simply hasn't been enough," Chief
Executive Daniel Elk said in a blog post announcing the roughly
600 job cuts.
"I was too ambitious in investing ahead of our revenue growth,"
he added, echoing a sentiment voiced by other tech bosses in
recent months.
Spotify's operating expenditure grew at twice the speed of its
revenue last year as the audio-streaming company aggressively
poured money into its podcast business, which is more attractive
for advertisers due to higher engagement levels.
At the same time, businesses pulled back on ad spending on the
platform, mirroring a trend seen at Meta and Google parent
Alphabet Inc, as rapid interest rate hikes and the fallout from
the Russia-Ukraine war pressured the economy.
The company, whose shares rose more than 3% in premarket
trading, is now restructuring itself in a bid to cut costs and
adjust to the deteriorating economic picture.
It said Dawn Ostroff, the head of content and advertising, was
leaving after an over four-year stint at the company. Ostroff
helped shape Spotify's podcast business and guided it through
backlash around Joe Rogan's show for allegedly spreading
misinformation about COVID-19.
The company said it is appointing Alex Norström, head of the
freemium business, and research and development boss Gustav
Söderström as co-presidents.
Spotify had about 9,800 full-time employees as of Sept. 30.
($1 = 0.9196 euros)
(Reporting by Eva Mathews in Bengaluru; Editing by Sherry
Jacob-Phillips and Shailesh Kuber)
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