Streaming firm Spotify to trim workforce in another blow to tech industry

Music streaming firm Spotify Technology SA has announced that is cutting six percent of its workforce, or roughly 600 jobs, adding to a glut of layoffs in the technology sector as companies prepare for a possible recession.

The company also said in its announcement on Monday that its chief content and advertising business officer, Dawn Ostroff, will depart as part of a broader reorganisation.

"In hindsight, I was too ambitious in investing ahead of our revenue growth. And for this reason, today, we are reducing our employee base by about six percent across the company," Spotify CEO Daniel Ek said on Spotify's official blog.

Spotify, which had about 9,800 full-time employees as of September 30, said it expects to incur about 35 million euros ($38.06 million) to 45 million euros ($48.95 million) in severance-related charges.

Shares in the company rose 3.5 percent in premarket trading.

Spotify's move comes at a time when tech companies are facing a demand downturn after two years of pandemic-driven growth during which they had hired aggressively. 

That has led the likes of Meta Platforms Inc to Microsoft Corp to shed tens of thousands of jobs.

Last week, Microsoft announced that it is letting go of at least 10,000 of its staff worldwide.

Sweden-based Spotify has seen advertisers pull back on spending, mirroring a trend seen at Meta and Google parent Alphabet Inc, as rapid interest rate hikes and the fallout from the Russia-Ukraine war pressure the economy.

The company had said in October that it would slow down hiring for the rest of the year and into 2023.

Its shares more than halved in a dismal 2022 for tech stocks.

READ MORE: Microsoft lays off 10,000 employees as job cuts in tech sector spread