Jan 23 (Reuters) – Spotify Technology SA
The tech industry is facing falling demand after two years of pandemic-fueled growth during which it has been hiring aggressively. This has led companies from Meta Platforms Inc (META.O) to Microsoft Corp (MSFT.O) to cut thousands of jobs.
“Over the past few months, we’ve made a tremendous effort to control costs, but it just hasn’t been enough,” chief executive Daniel Elk said in a blog post announcing the roughly 600 job cuts. .
“I was too ambitious investing before our revenue grew,” he added, echoing a sentiment expressed by other tech bosses in recent months.
Spotify’s operating expenses grew at twice the speed of its revenue last year as the audio streaming company invested aggressively in its podcast business, which is more attractive to advertisers due to rising levels of higher commitment.
At the same time, companies cut advertising spend on the platform, mirroring a trend seen at Meta and Google’s parent company Alphabet Inc (GOOGL.O), as rapid interest rate hikes and fallout from the Russian-Ukrainian war put pressure on the economy.
The company, whose shares rose 5.8% to $103.55, is now restructuring in a bid to cut costs and adjust to deteriorating economic conditions.
He said Dawn Ostroff, head of content and advertising, is leaving after more than four years with the company. Ostroff helped shape Spotify’s podcast business and guided it through backlash around Joe Rogan’s show for allegedly spreading misinformation about COVID-19.
The company announced that it is appointing freemium business manager Alex Norström and director of research and development Gustav Söderström as co-chairs.
Spotify had around 9,800 full-time employees in September. 30.
($1 = 0.9196 euros)
Reporting by Eva Mathews in Bengaluru; Editing by Sherry Jacob-Phillips and Shailesh Kuber
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