The music streaming service Spotify has said it is cutting about 600 jobs, as it became the latest big tech company to admit it expanded too quickly during the coronavirus pandemic.
Its co-founder and chief executive, Daniel Ek, told staff in a blogpost that the platform was reducing its workforce by 6% after he had been “too ambitious”.
“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 ads would insulate us,” he wrote. “In hindsight, I was too ambitious in investing ahead of our revenue growth.”
Spotify’s operating expenditure grew at twice the speed of its revenue last year, Ek wrote, as the Stockholm-based company invested heavily in its podcast business. The company makes money from its premium service, which accounts for about 85% of its revenue, with the rest coming from its ad-supported service.
“Over the last few months we’ve made a considerable effort to rein in costs, but it simply hasn’t been enough,” Ek wrote.
Amazon, Microsoft, Facebook parent Meta, Google’s owner, Alphabet, and the business software company Salesforce have all announced significant job cuts recently, citing an uncertain economic environment and overexpansion under Covid restrictions when there was a boom in demand for tech-related products and services.
Spotify has 456 million monthly users. Last year the No 1 most streamed artist on the platform globally was Bad Bunny, followed by Taylor Swift, Drake, The Weeknd and BTS.
Ek told staff that Dawn Ostroff, the head of content and advertising, was leaving after more than four years at the company. Ostroff helped shape Spotify’s podcast business and guided it through backlash around Joe Rogan’s show for interviewing guests who shared Covid-19 conspiracy theories.