By Kelvin Chan, Business Writer
LONDON (AP) --Music streaming service Spotify said Monday it's cutting 6% of its global workforce, becoming yet another tech company resorting to layoffs as the post-pandemic economic outlook weakens.
CEO Daniel Ek announced the restructuring in a message to employees that was also posted online.
As part of the revamp involving a management reshuffle, "and to bring our costs more in line, we've made the difficult but necessary decision to reduce our number of employees," Ek wrote.
Big tech companies like Amazon, Microsoft and Google announced tens of thousands of job cuts this month as the economic boom that the industry rode during the COVID-19 pandemic waned.
Stockholm-based Spotify had benefited from pandemic lockdowns because more people had sought out entertainment when they were stuck at home. Ek indicated that the company's business model, which had long focused on growth, had to evolve.
The company's operating costs last year grew at double its revenue growth, a gap that would be "unsustainable long-term" in any economic climate, but even more difficult to close with "a challenging macro environment," he said.
Spotify made "considerable effort" to rein in the costs over over the past few months, "but it simply hasn't been enough," he said.
"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," Ek said.
He said that's why the company is cutting its global workforce by about 6%, without giving a specific number of job losses. Spotify reported in its latest annual report that it had about 6,600 employees, which implies that 400 jobs are being axed.
"I take full accountability for the moves that got us here today," Ek said.
After years of heady growth, analysts say tech companies are being forced to cut jobs in preparation for an economic dowturn that's likely to cut demand for their software, products and services and reduce digital ad spending.
Just last week, Google announced it was slashing 12,000 jobs while Microsoft said it would cull 10,000 workers, bringing to at least 48,000 the number of cuts that Big Tech companies announced in January alone.
In early trading, shares of Spotify added 4.2% to $102.01.
Great Guns Signs Director Finn McGough
Great Guns has signed commercial, documentary and drama director Finn McGough for representation in the U.S., Middle East and Asia.
McGough’s commercial portfolio features a wide array of brands spanning Volkswagen, Marks & Spencer, McDonald’s, E45, Shredded Wheat, Lloyds, Budweiser, and more. His appreciation for human stories shines throughout--for McCain, he crafted a heartfelt celebration of all types of diverse families; for Nokia, he followed a day in the life of the oldest active hockey player; for Cancer Research UK, he uncovered the way children are influenced by cigarette packaging, earning a Bronze Arrow and Silver Clio. In addition to further British Arrows accolades, McGough has also won a D&AD Pencil and two APA Top 50 accreditations.
As a documentary director, McGough has traveled across continents, making Lonely Planet guides in Kenya and Italy, and even being blindfolded and dropped in Azerbaijan for Channel 4’s Lost adventure series. His subsequent observational BBC films, The Professional Charmer and Summer With The Johnsons, picked up a PRIX EUROPA for Best Non-Fiction Film and a Royal Television Society Breakthrough Talent nomination.
In the drama realm, McGough was nominated for Best Film and Best Cinematography at the Rushes Soho Shorts Festival for his short Flak, based on a story by Alan Sillitoe.
McGough said of Great Guns, “Their reputation as a global producer of fine and varying work says it all, so I’m looking forward to exciting times ahead (and to finally having a drink at their London pub--bonus!)”
Michel Waxman, managing executive producer at Great Guns in the U.S., added, “Finn’s passion for incredibly relatable storytelling... Read More