- Spotify stock (NYSE:SPOT) added more than 10 per cent on news that the music streaming leader will lay off about 1,500 employees, or 17 per cent of its workforce, to right-size costs
- The cut follows a 600-employee layoff in January, with 200 additional staff let go in June
- Spotify is a global music and podcast streaming platform with approximately 574 million users, including 226 million subscribers across 184 markets
- Spotify stock (NYSE:SPOT) has added more than 145 per cent year-over-year, but only about 42 per cent since 2018
Spotify stock (NYSE:SPOT) added more than 10 per cent on news that the music streaming leader will lay off about 1,500 employees, or 17 per cent of its workforce, to right-size costs.
The cut follows a 600-employee layoff in January, with 200 additional staff let go in June.
In a letter to employees, Spotify CEO Daniel Ek explained the December 2023 layoff by stating that “economic growth has slowed dramatically and capital has become more expensive” and that “Spotify is not an exception to these realities.”
The decision – which will cost about €130-€145 million in charges through fiscal Q2 2024 –follows excessive hiring and expansion during the COVID pandemic to capitalize on the low cost of capital and consumers’ increased reliance on technology, as well as a more than US$1 billion investment in its podcast business headlined by Kim Kardashian, Prince Harry and Meghan Markle.
The company expects a Q4 operating loss between €93 million-€108 million, down from its previous forecast of an operating profit of €37 million, and from a Q3 profit of €65 million, the latter thanks to streaming price hikes and global subscriber growth, with the company expecting to surpass 600 million monthly listeners by the holidays.
Amazon and Microsoft-owned LinkedIn have also announced layoffs in a trend tied to persistently high inflation, ensuing wage pressures, and technology’s high volatility compared with other sectors.
Spotify is a global streaming platform that includes more than 100 million tracks, 5 million podcast titles and 350,000 audiobooks. To date, the company has amassed approximately 574 million users, including 226 million subscribers across 184 markets.
Spotify stock (NYSE:SPOT) is up by 7.71 per cent, trading at US$194.62 per share as of 11:22 am ET. The stock has added more than 145 per cent year-over-year, but only about 42 per cent since 2018.
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