Spotify CEO Daniel Ek said in an email to employees on Wednesday that the business will “reduce hiring growth by 25 percent” over the next three quarters. Though Ek stated that Spotify will continue to hire new employees, he also warned that the company will “slow that pace and be a bit more prudent with the absolute level of new hires over the next few quarters,” according to the email, which was confirmed by a source familiar with the situation to The Hollywood Reporter.
The halt in hiring comes after Spotify’s CFO Paul Vogel hinted at job cuts during the company’s investor day in June, citing the extended economic downturn as a factor.
“We are aware of the increasing uncertainty regarding the global economy. And while we have yet to see any material impact to our business, we are keeping a close eye on the situation and evaluating our headcount growth in the near term,” Vogel said.
Spotify, which has its headquarters in Stockholm, currently employs over 8,000 people worldwide
The audio behemoth is significantly investing in podcasts and growing into audiobooks, with forthcoming acquisitions including AI tech firm Sonantic and audiobook platform Findaway. Even though Spotify expects its podcast business to become profitable in the coming years, Vogel claims the expenditures have cost the company €103 million in gross profit, or around $110 million.
Spotify’s layoffs come on the heels of Netflix’s recent announcement that it will be “cutting back” spending to keep within its margins during its Q1 earnings call. Since then, Netflix has fired off a big number of employees, warned them to “use [its] subscribers’ money wisely,” and reevaluated its large film investment.