As soon as this week, Spotify Technology SA will be joining the ranks of technology companies such as Amazon.com Inc. and Meta Platforms Inc., cutting their workforce to lower operational costs – according to individuals familiar with the plans.
Spotify recently eliminated 38 staff members from their Gimlet Media and Parcast podcast studios without disclosing an exact number of layoffs. As stated in Spotify’s third-quarter earnings report, the company currently has around 9,800 employees.
Despite an influx of job openings in the tech world due to the pandemic, advertising revenue drops and a bleak economic outlook have led many firms to adjust their workforce sizes.
Recently, some of the world’s largest companies such as Amazon.com, Meta, and Microsoft Corp. declared layoffs – but that was just a prelude to Google parent Alphabet Inc., who on Friday announced they would be cutting about 12,000 jobs worldwide; which is equivalent to 6% of their global workforce.
A Spotify representative refused to provide any remarks regarding the upcoming cuts.
At the start of 2019, the company made a significant investment in podcasting. With more than one billion dollars dedicated to this endeavor, they acquired networks and software creation programs; as well as obtained hosting services and secured rights for popular shows such as The Joe Rogan Experience and Armchair Expert.
Notwithstanding, the investments have taxed investors’ tolerance. Shares plunged 66% last year as shareholders questioned when they would start to reap rewards. Spotify administrators proclaimed in June that their podcast business should develop a return within one to two years.
Although the news is tough to stomach for many existing Spotify employees, it’s a necessary step for the firm to stay afloat in this turbulent economy. For now, all eyes are on Spotify as they prepare to make some hard decisions to remain competitive.
We can only hope that the layoffs are done fairly and that those affected receive fair compensation in the process. We will continue to keep you updated on these developments as they. Stay tuned!
Shivendra Tiwari is an Engineer and an MBA in Marketing. He is the Content head at Marketing91 and a thorough Online Marketing enthusiast. Shivendra loves to follow different brands and study their Business and Marketing tactics.