Spotify to lay off nearly 600 employees

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After slowing its pace of hiring last year, Spotify Technology SA confirmed Monday that it was laying off employees, adding to the wave of jobs cuts sweeping across the tech industry.

The streaming music service disclosed in a filing with the Securities and Exchange Commission that it was reducing its workforce by about 6%, which translates to about 588 jobs.

Bloomberg News had originally reported over the weekend that the company was planning job cuts as soon as this week.

The Luxembourg-based company said it expects to record charges of EUR35 million to EUR45 million ($38.1 million to $48.9 million) related to severance payments.

Spotify’s U.S.-listed shares SPOT, +4.63% rallied 4.4% toward a four-month high in premarket trading,

In October, Spotify laid off at least 38 employees at its Gimlet and Parcast podcast units. Last June, Spotify Chief Executive Daniel Ek told employees that the company would reduce hiring by 25%, according to Bloomberg and CNBC reports.

As of the end of its third quarter, Spotify had about 9,800 employees, according to its earnings report. More than 55,000 tech workers have been laid off so far in 2023, according to the website Layoffs.fyi, including 12,000 from Google parent Alphabet Inc., 10,000 from Microsoft Corp. and hundreds more from Intel Corp.

Stockholm-based Spotify has been pressured by massive spending on podcasts in recent years, which have yet to deliver profits and have weighed on margins. In June, Ek predicted a meaningful ramp in profitability within the next couple of years.

Separately, Spotify said Chief Content & Advertising Business Officer Dawn Ostroff will leave the company.

Spotify shares have sunk about 50% over the past 12 months, compared with the S&P 500’s SPX, +1.89% 10% decline over that time.

This article was originally published by Marketwatch.com. Read the original article here.

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