Spotify to lay off 600 employees, CEO Daniel Ek makes big announcement

6% of the total employees, which is about 10,000 people would be cut due to the need of improving efficiency, said Spotify  CEO Daniel Ek. The Swedish music-streaming company had about 9,800 full-time employees last year and is expected to incur at least €35 million in severance-related charges. Spotify CEO Ek shared a press release under "For the Record" on January 23, in which he talked about the company's organisational changes with all Spotify employees. 

Spotify layoff: Press release by CEO

"In hindsight, I was too ambitious in investing ahead of our revenue growth," said Daniel Ek, Spotify CEO in the press release.

Further, in the statement, he wrote, "We are reducing our employee base by about 6 percent across the company. I take full accountability for the moves that got us here. Like many other leaders, I hoped to sustain the strong tailwinds from the pandemic and believed that our broad global business and lower risk of the impact of a slowdown in ads would insulate us." 

The company would be paying the accrued and unused vacation to any departing employee and would continue to cover healthcare for employees during their severance period.

Further in the layoff, the chief content and advertising business officer, Dawn Ostroff has decided to depart Spotify. In the press statement, she was praised for her tremendous mark not only on Spotify but on the audio industry overall. "Because of her efforts, Spotify grew our podcast content by 40x, drove significant innovation in the medium, and became the leading music and podcast service in many markets," said CEO Ek in the press release. 

The announcement by the Swedish company follows last week's announcements of losses at Microsoft and Alphabet. Alphabet, which owns Google, said it would shed 12,000 jobs, while Microsoft said up to 10,000 employees would lose their jobs, reported BBC.