Audio streaming company Spotify is expected to lay off 6% of its global workforce, equating to roughly 600 employees.
The company currently employs just over 9,800 full-time employees globally, according to its last earnings report.
“While we have made great progress in improving speed in the last few years, we haven’t focused as much on improving efficiency,” said the company’s CEO Daniel Ek in an all-staff memo today.
“We still spend far too much time syncing on slightly different strategies, which slows us down. And in a challenging economic environment, efficiency takes on greater importance. So, in an effort to drive more efficiency, control costs, and speed up decision-making, I have decided to restructure our organization.”
Ek noted that the layoffs are necessary to become more efficient and cost-effective and will allow for quicker decision-making.
Affected employees will be informed “over the next several hours” and receive roughly five months’ worth of severance as well as healthcare coverage.
“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,” continued Ek. “In hindsight, I was too ambitious in investing ahead of our revenue growth.”
In addition to the layoffs, Spotify’s head of content and ads, Dawn Ostroff, is also set to leave the company. During her tenure, Ostroff has played an instrumental role in growing Spotify’s podcasting business by increasing its podcast content by “40x.”
Assuming Ostroff’s role will be Alex Norström, the company’s chief business officer.
The layoffs follow recent restructuring efforts at several other tech companies, such as Google, Wayfair, and Microsoft.