Spotify announced layoffs of about 17% of its workforce across the company on Monday. More than 1,500 employees will be affected by this job reduction move.
Spotify layoffs: Music streaming giant Spotify on Monday announced layoffs of about 17% of its workforce across the company. Spotify founder and CEO Daniel Ack said in a note to employees that it is important for the company to right-size the workforce to meet the challenges ahead.
The company gave this reason
Daniel Ack cited slow economic growth and increased capital costs as reasons for the layoffs and claimed the company used low-cost capital in 2020 and 2021 to invest heavily in the business. Daniel Aik said that I have taken the difficult decision to reduce my total number of employees in the company by approximately 17%. I believe that this will impact those individuals who have made valuable contributions. To put it bluntly, many smart, talented and hard-working people will leave us.
So many employees will be furloughed
According to TechCrunch, Spotify employs approximately 8,800 people and this job cut move will affect more than 1,500 employees. Under Severance Pay, the company will start with a baseline for all employees, in which the average employee will get about five months of severance. Its calculation will be done on the basis of local notice period requirements and employee tenure.
Third layoff of the year
The company will continue to provide health care to the employees during their retirement period. All employees will be eligible for outplacement service for two months. This is the third round of layoffs by Spotify this year. In June, the company laid off 200 employees or 2% of its workforce from its podcast division as part of a corporate restructuring, while in January, it laid off 6% of its workforce or about 600 employees globally.
