Spotify Technology SA announced the need to cut 6% of its full-time employees and assured that it will fulfill its obligations to them in the form of payments in connection with the dismissal. This is about $50 million. So, the company is preparing for the expected recession in the technology industry.

Daniel Ek, founder and CEO of streaming audio service Spotify, said that for several months, management has been trying in every possible way to reduce the company's costs. Since the measures taken did not give the expected results, it was decided to take a course of restructuring, personnel changes and the reduction of approximately 600 hired workers. This will reduce costs and make it easier to get through the economic crisis.

Last year, Spotify's recurring expenses grew 2x faster than revenue. The main reason for this skew is the company's heavy financial investment in podcasts, whose high engagement rates attracted advertisers. Another is the reduction in the cost of advertising placed on the platform of the service. To stabilize the situation and as part of the reorganization, Dawn Ostroff, who led the content and advertising department, will leave her position. She helped launch the Spotify podcast business and led it for over 4 years.

Large-scale staff cuts are a global trend that has recently affected even such giants as Meta and Alphabet Inc. They occur as a forced reaction to a significant decline in demand that has befallen the technology industry after 2 years of active growth caused by the coronavirus when companies massively increased their staff. Now they have to lay off thousands of workers.