Over the last few months, we’ve made a significant effort to rein in costs, but it simply hasn’t been enough,” Spotify CEO Daniel Ek said in a letter to employees. “While it is clear that this path is the right one for Spotify,” he continued, “it does not make it any easier.”
Spotify had 9,808 full time employees, among them 600 have been laid off on 24 Jan 2023. Spotify is also planning to increase their premium services cost higher in 2023.
On Monday, he revealed, “In hindsight, I was too ambitious in investing ahead of our revenue growth. He continued, “I take full accountability for the moves that got us here today.”
After increasing their employee numbers, all tech companies have recently announced significant cuts as a result of the economic turmoil. Many businesses are reducing recent hires and avoiding long-term projects.
In comparison to their revenue, Spotify’s operating costs were twice as much of their revenue. According to Spotify CEO Daniel Ek, the decision to lay off workers was challenging but necessary. He said, “Like many other leaders, 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 advertising would insulate us.”