Madiha Yaqoob
The third round of job layoffs announced by Spotify Technology SA this year will result in a 17% reduction in the company’s personnel. The music streaming company announced that impacted employees would be notified on Monday and can interact with human services by the end of the following day. A spokeswoman estimated that about 1,500 people will be affected by the layoffs.
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Spotify CEO Daniel Ek stressed the need to prevent excessive spending despite the company setting a record-breaking year in which it is expected to add over 100 million members and declare a rare profit in the most recent quarter. The corporation had made large expenditures in podcasting in an attempt to diversify its economic model after experiencing losses in the past from licensing deals with music rights holders. Since then, though, it has reduced its commitment to original audio programming.
Ek emphasized in a statement the need for a more efficient strategy, saying that too many resources had been allocated to administrative and supporting duties instead of helping to create meaningful opportunities. Delivering value to important stakeholders, such as creators and consumers, is crucial, he stressed.
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This latest round of job cuts comes after roughly 6% in January and 2% more in June of last year. Ek declared that the company was going to implement a leaner organizational structure with the goal of strategically allocating more profits to support business initiatives. He will speak about these reorganization initiatives when he meets with staff on Wednesday.
Ek noted the difficult economic climate, pointing to higher capital costs and a notable slowdown in economic growth. He claimed that these larger economic realities still affect Spotify, necessitating the development of a more effective and targeted organizational structure.
