Spotify, the Swedish music-streaming giant, revealed it is slashing 17% of its personnel, which is around 1,500 jobs, in its attempt to reduce expenses.
Daniel Ek, the company's chief executive, asserted that he had to make the arduous decision due to the drastic decline of economic growth.
Spotify has roughly 9,000 employees, and Mr Ek stated that drastic measures must be taken to reduce expenses for the organization to attain its goals.
He indicated his recognition that the reductions would be "exceptionally distressing for our group".
Mr Ek acknowledged that this will have a significant effect on people who have brought invaluable contributions; addressing the situation bluntly, he said many talented and hard-working staff will be leaving.
Earlier this year, Spotify reduced its personnel, however the most recent plans dwarf those past announcements.
For its most recent results, Spotify noted a profit of €65m (£55.7m) for the timeframe of the three months ending in September. This is the company's first quarterly profit since a year ago, due to the hike in prices and the increased number of paying subscribers.
The tech firm has been broadening its reach to a global audience with the goal of reaching a total of one billion users by the year 2030.
As of now, there are 601 million, which is an increase from 345 million at the end of last year.
Mr Ek commented that, despite the recent "favorable" outcomes, the staff reductions to be declared "will appear remarkably extensive" to many individuals.
He declared that Spotify had contemplated instituting lesser cutbacks during 2024 and 2025, but determined that more drastic measures were necessary to better the firm's finances.
Since its introduction, Spotify has invested large amounts for the expansion of the company and attaining exclusive content, for instance, podcasts from famous figures such as Michelle and Barack Obama and the Duke and Duchess of Sussex.
It was estimated that Harry and Meghan received $25m (£19.7m) for their agreement which produced twelve episodes in a span of two and a half years before concluding in June.
In September, Mr Ek commented to the BBC regarding podcast content, stating that "some of it has been successful, some of it has not."
The company is set to commence the process of informing those employees who will be affected on Monday. They will be given five months worth of severance pay, holiday pay and healthcare coverage for the duration of the severance period.
Spotify will offer assistance to workers whose immigration status is tied to their job.
The tech industry has recently made tens of thousands of job cuts following a surge in business during lockdowns that were imposed due to the Covid pandemic. These recent job reductions are the latest in a series.
The British telecom group BT announced in May that they intend to eliminate up to 55,000 positions by the end of the decade.
Meta and Microsoft, two major technology companies, announced their plans to lay off up to 10,000 workers this year.
Amazon declared that it was eliminating more than 18,000 positions around the world, while Alphabet, the parent corporation of Google, announced it was letting go of roughly 12,000 people.
Also, Yahoo and LinkedIn have had to resort to layoffs this year because of the impact of the downturn on smaller companies.
Apple, though, has defied the pattern, proclaiming that they will be taking on some personnel in the artificial intelligence area.
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