Spotify to Reduce Hiring Growth by 25 Percent, CEO Daniel Ek Says
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Spotify will “reduce hiring growth by 25 percent” over the next few quarters, according to an email sent by CEO Daniel Ek to employees on Wednesday.
Though Ek said the company will continue to hire new staff, he cautioned that Spotify will “slow that pace and be a bit more prudent with the absolute level of new hires over the next few quarters,” the email said, an individual with knowledge of the matter confirmed to The Hollywood Reporter.
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The slowdown in hiring comes shortly after CFO Paul Vogel hinted at Spotify’s investor day earlier in June that the company would be reducing its headcount amid the ongoing economic downturn.
“We are clearly aware of the increasing uncertainty regarding the global economy. And while we have yet to see any material impact to our business, we are keeping a close eye on the situation and evaluating our headcount growth in the near term,” Vogel said.
To date, Spotify — with its headquarters in Stockholm — employs more than 8,000 staffers around the world. The audio giant is investing heavily into podcasts and is expanding into audiobooks, with upcoming acquisitions in the space including the AI tech company Sonantic and the audiobook platform Findaway. Though Spotify expects its podcast business to become profitable in the next few years, Vogel said those investments have had a €103 million, or roughly $110 million, negative impact on gross profit.
Spotify’s reduction in hiring growth follows similar messaging from Netflix, which recently told investors during its Q1 earnings interview that the streamer would be “pulling back” its spending to stay within its margins. Since then, Netflix has implemented multiple rounds of layoffs, reminded employees to “spend [its] members’ money wisely” and has reevaluated its massive spending on films.
