In the most recent event of tech layoffs, Spotify has announced its intentions to terminate 600 employees (roughly 6% of the 1,000-employee workforce) for cost-cutting reasons following the covid-19 pandemic.
The story is the same for numerous tech companies. The covid-19 pandemic resulted in increased customer usage followed by substantial growth, and now that consumers have returned to their normal lives profits have dwindled and as a result Spotify, among others, must rein in costs.
Spotify’s chief executive Daniel Ek last year the company decided to slow hiring but it quickly became apparent that this would not solve the problem. The company’s operating costs nearly doubled its revenue and as a result, the company made the hard decision to begin reducing its workforce starting with the most recent hires.
Source: Financial Times