In recent weeks, Microsoft, Google, Amazon, Facebook, and Twitter have announced major job cuts, totaling thousands across each company. As the economy continues to slow, major tech companies are reacting by cutting down workforces. Spotify is joining the list of companies taking this approach and says it will release 6% of its global employees.
A post on the Spotify website from CEO Daniel Ek confirms the company will cut potentially thousands of jobs. Ek explains that this decision is necessary because the companies operational expenditure is outpacing revenue growth by 100%.
“That would have been unsustainable long-term in any climate, but with a challenging macro environment, it would be even more difficult to close the gap,” he says.
Ek – which has been linked with multi-billion-dollar purchases of sports teams, by the way – says Spotify made efforts to reign in costs before reaching this decision.
“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. In hindsight, I was too ambitious in investing ahead of our revenue growth.”
The company will give departing employees five months of severance pay, healthcare benefits, and immigration support. Outplacement services for two months will also be available.
Tech Exodus
Earlier this month, Microsoft brushed off reports of major job cuts as “rumor” before then confirming it will slash over 10,000 employees over the next three months. Google joined in last week by confirming it will cut 12,000 jobs. Both layoff cuts will account for 5% or more of Google and Microsoft's global workforce.
Amazon is also releasing around 20,000 employees, while Twitter and Facebook have also announced major reductions.
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