Jan 23 (Reuters) – Spotify Technology SA ( SPOT.N ) said on Monday it plans to cut 6% of its workforce and will take about $50 million in capital, adding major layoffs in the technology sector in the process. about the recession.
The tech industry is facing a sharp slowdown after two years of strong growth that have seen hiring struggle. That has prompted companies from Meta Platforms Inc ( META.O ) to Microsoft Corp ( MSFT.O ) to cut thousands of jobs.
“Over the past several months we have been trying to cut costs, but it has not been enough,” Chief Executive Officer Daniel Elk said in a blog post announcing the nearly 600 job cuts.
“I was willing to invest ahead of growth,” he added, echoing the sentiments of other tech bosses in recent months.
Spotify’s operating income more than doubled last year as the streaming company aggressively poured money into its podcast business, which is attractive to advertisers because of its high volume.
At the same time, businesses stopped spending on advertising on the platform, reflecting the trend seen at Meta and Google parent Alphabet Inc ( GOOGL.O ), as rising interest rates and the fallout from the Russia-Ukraine war put pressure on the economy.
The company, whose shares rose 5.8% to $103.55, is now restructuring itself to cut costs and adjust to the growing economy.
He said Dawn Ostroff, chief product and marketing officer, is leaving the company after four years. Ostroff helped organize Spotify’s podcast business and steered it back around Joe Rogan’s show for 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 9,800 full-time employees as of September 30.
($1 = 0.9196 euros)
Eva Mathews reports in Bengaluru; Edited by Sherry Jacob-Phillips and Shailesh Kuber
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