Business

Spotify to cut 6% of its workforce

Spotify logo displayed on a phone screen and headphones are seen in this illustration photo taken in Poland on October 18, 2020. (Photo Illustration by Jakub Porzycki/NurPhoto via Getty Images)

(CNN) — Spotify said Monday that it will cut 6% of its global workforce to reduce costs, joining tech companies including Amazon and Microsoft in slashing headcount as the global economy slows.

In a letter to employees posted on the company’s website, CEO Daniel Ek took full responsibility for the job cuts, which he called “difficult but necessary.”

“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. In hindsight, I was too ambitious in investing ahead of our revenue growth,” he said.

The Stockholm-headquartered music streaming business had about 9,800 employees globally as of September 30.

Over the past few months, major tech companies have swiftly reversed a pandemic hiring spree that saw them add thousands of workers to keep up with a surge in demand from households and businesses for services such as online shopping and videoconferencing.

The same companies have recently made deep cuts to their workforces, as inflation weighs on consumer spending and rising interest rates squeeze funding. The demand for digital services during the pandemic has also waned as people return to their offline lives.

Over the past three months, Amazon, Google, Microsoft and Facebook-parent Meta have announced plans to cut more than 50,000 employees from their collective ranks.

The recent cuts in most cases amount to a relatively small percentage of each company’s overall headcount, essentially erasing the last year of gains for some while leaving them with enormous workforces.

Spotify’s decision to shed about 590 jobs is part of a wider reorganization to improve efficiency and “speed up decision-making,” according to Ek. As part of the changes, engineering and product work will be centralized. Chief content officer Dawn Ostroff had also decided to leave the company, Ek said.

— Clare Duffy contributed to this report.