December 5, 2023/ 5:45 AM IST: The globally famous music company, Spotify will slash 1500 employees to improve cost efficiency and other things inside the company.
The Founder and CEO Daniel EK explained the reasons behind this decision through an online journal, stating that while the company is performing well, the current global instability and rising inflation rates make it challenging to sustain a large workforce. This year December 2023 became the worst month in comparison to other layoffs for the employees of Spotify got fired in a very extreme manner.
Lay-off in Spotify, 2023:
In January 2023, Spotify, the popular music streaming service, made a significant decision to lay off 600 employees, which accounted for 6% of its workforce. The CEO of the company cited the global recession as the primary reason behind this move. The decision was aimed at making the company more cost-effective and agile in decision-making, as it faced increasing competition in the music streaming industry. The layoff was a challenging decision for the company, but it was necessary to ensure its long-term sustainability and growth.
Again, in June 2023, Spotify reduced its podcast unit workforce by 2% and merged the Parcast and Gimlet Studios. In the previous lay-off, Spotify cancelled 11 podcast shows as it thought of focusing on the exclusive hits and originals.
Now on December 4, 2023, the series of unemployment continued to hit the employees. This lay-off is said to be the biggest one, as the company decided to take down 17% of its employees from the company.
The CEO stated that many employees will be affected but he understands and recognizes their contribution of time and talent to the company.
“To align Spotify with our future goals and ensure we are right-sized for all the challenges ahead, I have made a difficult decision to reduce our total headcount by approximately 17% across the company,” said the CEO.
“I recognize this will impact many individuals who have made valuable contributions. To be blunt, many smart, talented and hard-working people will be departing us”, he said.
In 2020 and 2021, the company started expanding with team expansion, great content, high marketing and investments. But now the company feels not in a good position. For this, the company thought to reduce costing thought to reduce costing but that didn’t happen. Following the months of January and July of this year, the company cut off its employees to make the company’s work smooth and efficient. They called this lay-off a “strategy” to get more investment. Also, the price of the subscription plan increased, with the expansion of audiobooks and podcasts.
The employees who are impacted by this decision can go for a one-on-one conversation with the HR of the company till Tuesday. Also, the company will help the employees to pay them till the time they work. If any employee works without taking a holiday, they will be paid on this basis. The company will also help the employee with immigration, healthcare and finding jobs for two months.
However, in early 2024, Spotify decided to pay the artist whose song streamed above 1000 and the music that people enjoyed.
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