It sounds like we’re a broken record saying the same thing again, but honestly, the wave of tech layoffs in 2023 doesn’t seem to be ending. We have seen Amazon, Google, Microsoft, Salesforce, Meta and several others accumulate more than 50,000 people laid off and the month of January is not over yet. To all these, we now add Spotify in the fashion of layoffsknowing that will cut 6% of its workforce after overhiring during the pandemic.
We have had a very intense few weeks in terms of layoffs from well-known technology companies in the sector. Already looking at the figures of the first week of 2023 we were scared to see that they were comparable to the dismissals of a Whole month. After that came several companies carrying out massive layoffs, thus highlighting Amazon with his cut of 18,000 workers either Google saying goodbye to 12,000 employees. The same thing happened with Microsoftthat after announcing the dismissal of 10,000 of its workerswe found out that the developer of Halo Infinite. In the same way that it happened with the increase in prices where once a company started, the others followed, the same thing has happened with layoffs.
Spotify follows the trend and will lay off 600 workers
It seems that all companies have agreed that 2023 will be the year of job cuts and layoffs. After having seen several companies, now we add one more, which is known for being the most popular music streaming application. We are talking about Spotify, which thus becomes the last company to announce its staff cuts this January. Although seeing the situation, we would not be surprised if this is not the last and with the remainder of the year the layoff figures are worrying.
A Spotify spokesperson said the layoffs will affect about 600 workers, which is equivalent to approximately 6% of the total workforce. We are talking about quite high figures taking into account that it has not indicated which department the cuts have affected either.
The cuts come to reduce post-pandemic expenses
As indicated by the Spotify CEO, daniel ek, the decision to lay off 6% of its workers is necessary for the company to function efficiently. And it seems that the company made the decision to invest a lot of money during the time of the pandemic, since the platform grew a lot in this period. However, as has happened in many other cases, now that the worst of COVID is over, the income figures have returned to normal, but the expenses have not. What’s more, last year Spotify’s expenses were double revenue growth. This results in an unsustainable situation, even more so in an economic situation like the current one.
In addition, the CEO apologizes for being too ambitious and overinvest, causing expenses to exceed income. Now that Spotify’s layoffs have been made official, all affected workers will receive 5-month severance pay. Although this figure will depend on their seniority in the company as well as whether they were they will pay all vacations accumulated and unused. Laid off employees will continue to receive health insurance while the indemnity lasts. As an addition, everyone will also have the right to two months of services reemployment to help them find a new job.
Along with the 600 laid off Spotify workers, the company will lose Dawn Ostroff, the Director of Contents and Advertising. Is has decided to leave Spotify after having multiplied the platform’s podcasts by 40 and doubling advertising revenue.