Spotify will slash 6% of its workforce citing overambitious investments according to the music streaming service’s CEO Daniel Ek.
“Like many other leaders, I hoped to sustain the strong tailwinds from the pandemic and believed that our broad global business and lower risk to the impact of a slowdown in ads would insulate us,” said Ek in a memo to staffers.
“In hindsight, I was too ambitious in investing ahead of our revenue growth. And for this reason, today, we are reducing our employee base by about 6% across the company. I take full accountability for the moves that got us here today,” he continued.
Ek painted a grim picture for Spotify’s future in general, stating that the company is not self-sufficient enough for a sustainable future. He explained that last year, operating expenses outpaced revenue growth, indicating a slim, unsustainable profit margin.
“We still spend far too much time syncing on slightly different strategies, which slows us down. And in a challenging economic environment, efficiency takes on greater importance.”
Those affected will be given the opportunity to have one-on-one conversations where they can discuss their next move and their severance packages.
In addition to the 600 employees that will be laid off, Spotify will also see Chief of Content Dawn Ostroff step down from her role.