Topline
Spotify CEO Daniel Ek told employees Wednesday the company will reduce hiring growth by 25%, according to several reports, joining a growing number of companies that are taking cost-cutting measures amid fears of a recession.
In this photo illustration, the logo of the Swedish music streaming service Spotify is displayed on … [+]
Key Facts
In an email to employees, Ek said the company would still hire new employees, but will “slow that pace and be a bit more prudent… over the next few quarters.”
Crypto-brokerage Coinbase said Tuesday it planned to lay off roughly 18% of its staff to lower costs.
Real estate firms Compass and Redfin announced 10% and 8% reductions in staff Tuesday, respectively.
Reuters reported last week Elon Musk wanted to lay off about 10% of Tesla’s salaried staff and implement a hiring freeze for those positions.
Key Background
The Federal Reserve on Wednesday instituted a 75 basis point increase in interest rates, the largest in 28 years. The hike comes after inflation rose an unexpected 8.6% in May, hitting a 40-year-high. Worries of an impending recession continue to grow as the S&P 500 fell Monday into bear market territory.
Big Number
8,230. That’s how many full-time employees Spotify had globally at the end of the first quarter. The company reported 422 million monthly active users, making it one of the most popular streaming services.
Tangent
Last week, CFO Paul Vogel told investors Spotify was monitoring “the increasing uncertainty regarding the global economy” and “evaluating our headcount growth in the near term” but said the company has “yet to see any material impact to our business.” Despite user growth, Spotify executives told investors that some portions of its business, like podcasting, are still in “investment mode” and are not yet profitable, despite funneling $1 billion into the program.
Further Reading
Elon Musk Reportedly Wants To Lay Off 10% Of Tesla’s Workforce As He Frets About The Economy (Forbes)
Compass, Redfin Shed Workers Amid Bleak Housing Market (Forbes)
Dow Jumps 300 Points After Powell Says Fed Could Hike Rates By 75 Basis Points Again In July (Forbes)
Inflation Unexpectedly Spiked 8.6% In May—Hitting 40-Year High As Gas Prices Surge Again (Forbes)
Source: https://www.forbes.com/sites/marisadellatto/2022/06/15/spotify-reducing-hiring-growth-by-25-ceo-says/