Spotify layoff was announced Monday and would impact over 6% of its global workforce to reduce costs, joining technology companies such as Amazon and Microsoft in cutting staff in the face of a slowing global economy.
In a letter to employees posted on the company's website, the company's CEO, Daniel Ek, took full responsibility for the job cuts, which he called "difficult but necessary."
"Like many other leaders, I expected to hold off the strong tailwinds of the pandemic and believed that our broad global business and the lower risk of the impact of a slowdown in announcements would insulate us. In hindsight, I was overly ambitious in investing ahead of our revenue growth," he said.
The Stockholm-based music streaming company had about 9,800 employees worldwide as of September 30.
More than 46,000 workers in U.S.-based tech companies have been laid off in mass job cuts so far in 2023, according to a Crunchbase News tally, and the year is just getting started. That number includes Microsoft's 10,000-person cut and Google parent Alphabet's 12,000-person layoff announcements this week.
As explained by Business Insider, only a year ago, at this time, the Big Tech sector was euphoric. Technology stocks were soaring. The number of employees at many large companies nearly doubled during the pandemic crisis.
Workers were enjoying rising wages and a glut of job opportunities, leading to the phenomenon known as the 'great resignation' and a resurgence of employee empowerment.
However, with persistent inflation and the hawkish attitude of the Federal Reserve, the economic outlook has been worsening severely. Many economists and business leaders are now predicting that a downturn is coming; the big question is how deep it will be.
Executives at the largest technology companies are in an anxious waiting game, bracing for the storm's arrival.
"We seem to be facing a new stage: the 'big doubt,'" says Keith Hwang, a director at technology investment fund Selcouth Capital Management. "No one is entirely clear how bad the crisis will be. No one can predict the actual impact. Based on that, we see many companies trying, first and foremost, to cut costs significantly in the face of doubt," he explains.
Overall, the crisis is due to a combination of over-expending and miscalculations on how much will contract the digital economy once the Covid artificial boost of e-commerce is over. So far, no one knows how much - or how bad - things will continue to go in the Big Tech and e-commerce world. But one thing seems sure: 2023 won’t be a good year.
The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.