Spotify is latest big tech company to slash jobs

Spotify said Monday it will lay off 6% of the music streaming company's workforce, making it the latest big technology company to announce a sizable reduction in payrolls as the U.S. economy slows.

Tech giants including Google-parent Alphabet, Amazon, Meta and Microsoft have moved to slash jobs in recent months ahead of a possible recession. In January alone, industry players have cut roughly 50,000 jobs, reversing a hiring spree that surged during the pandemic as millions of Americans moved their lives online. 

Spotify has roughly 9,800 workers, according to a regulatory filing, so the layoff will eliminate nearly 600 jobs.

"We still spend far too much time syncing on slightly different strategies, which slows us down," CEO Daniel Elk said in a note to employees posted on Spotify's website. "And in a challenging economic environment, efficiency takes on greater importance. So, in an effort to drive more efficiency, control costs and speed up decision-making, I have decided to restructure our organization."

Dawn Ostroff, Spotify's chief content office, is also leaving the company as part of the shakeup, Elk said.

Ek said that all laid-off workers would find out Monday in "one-on-one conversations." Those affected will get an average of five months' severance pay and health coverage as well as two months' career support, according to the letter.

Based in Sweden, the streaming service has about 450 million monthly users, 195 million of whom pay for an ad-free service. It generated 9.6 billion euros in revenue ($10.4 billion) in 2021, the most recent full year available. But Spotify posted an operating loss for that year, as well as for the first nine months of 2022, as it invested heavily in expansion.