Spotify to cut 17% of staff in cost-cutting measure | DW
Spotify, the digital music giant, has recently announced plans to lay off approximately 1,500 employees, constituting around 17% of its workforce, as part of a cost-cutting initiative to align with future goals. This decision, made by Spotify’s co-founder and CEO Daniel Ek, follows a rare €32 million ($34.7 million) profit in the third quarter, attributed partially to recent price hikes. Despite occasional profitable quarters, Spotify has yet to achieve a full-year net profit.
This move marks the third round of layoffs in 2023 for Spotify, which had around 9,800 employees at the end of 2022. The company had previously laid off 600 employees in January and an additional 200 in June. The broader tech industry has also witnessed job cuts from major players like Google, Amazon, and Meta over the last 18 months, fueled by concerns about a potential recession, rising interest rates, and investor expectations. Interestingly, the COVID-19 pandemic initially led to significant growth for digital service providers, prompting hiring surges.
In response to the post-pandemic challenges, Spotify is diversifying its services, offering 200,000 audiobooks to its premium subscribers in November. CEO Daniel Ek emphasizes the need for Spotify to be “relentlessly resourceful” in its operations, innovation, and problem-solving, suggesting that being lean is not merely an option but a necessity for the company’s future………
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Considering the evolving landscape of the tech and digital service industry, what strategic approaches do you think companies like Spotify should prioritize to maintain financial sustainability and growth in the face of economic uncertainties and shifting consumer behaviors?
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i feel as if too stay stable you have too have a balance of pay checks and workers too say in a sense cuts will be needed too keep things afloat if therevenue is outdoing the paychecks.
To maintain financial stability they should balance how much money the workers get and how much they are gaining. They could lower the price of premium and include less perks and add another tier to add more money
At this stage in their finances they could consider lowering premium subscription prices instead of increasing them. Though it may not seem profitable in the short term, they will gain customer loyalty and have a stable income from them. Until then they may have to adapt to this sudden shift in availability of employees.
they should lower the price of spotify premium so that it can attract more customers and they can pay their employees.