The list of companies, specially in tech, that are laying off employees or slowing or freezing hiring continues to grow this year.
You can thank the funding crunch, economic downturn, cooling of investor interest for that, fears of a recession after an economic boom of over 10 years, rising interest rates, falling stocks, and soaring inflation, among other reasons.
This list includes, unfortunately, high-profile names such as Coinbase (which will lay off 18% of its workforce after rescinding several offers and extending hiring freeze) and Meta (which has slowed down hiring of new employees).
Now, Spotify, the world’s leading on-demand audio service, joins the list as it will start to slow its hiring by 25% and cut down expenses. The same was announced in an email to employees by Spotify CEO Daniel Ek.
So far, Spotify’s employee base is around 8230 across the globe. This current slowing of hiring also comes after it went on a recruitment spree – the company recruited over 2000 people to add to its employee base between 2019 and 2021.
This is a contrast to its announcement earlier this month. The company had, at that time, offered its investors an upbeat assessment of its business and predicted that its investments in podcasting and audiobooks would fuel its growth over the next decade.
Spotify’s shares rose by nearly 9% in afternoon trading Wednesday in New York. Spotify is currently trading at $105.35.
For now, the company intends to hire and grow, albeit at a much reduced pace and be more prudent when it comes to the “absolute level of new hires” over the following few quarters.
It will also observe the uncertainty in the economy and evaluate its headcount growth “in the near term,” according to Paul Vogel, Spotify’s Chief Financial Officer.
The silver lining, in the current development, is that nobody is getting laid off – a situation which might change if Spotify decides to emulate Coinbase and lay off a portion of its workforce.
It remains to be seen whether this will affect Spotify’s ambitious targets – Ek said that Spotify would reach the one billion listener-milestone by 2030, as well as generate $100 billion in revenue annually with a gross margin of 40%.