The technology sector is experiencing a real January slope. On the 5th, Amazon announced the elimination of 18,000 jobs; on the 18th, Microsoft announced the dismissal of 10,000 people and on the 20th, Google announced the dismissal of 12,000 workers. These firms join companies such as Meta or Twitter that laid off 11,000 and 3,700, respectively, in 2022.
This weekend, in addition, another technology company announced a staff cut. This is Spotify, a company that announced on Monday, January 23, the dismissal of 600 workers from its workforce.
Layoffs at Spotify. Daniel Ek’s company was planning to cut staff this weekend, Bloomberg reported on January 22, citing sources “familiar with the plan.” This Monday, in addition, it has been known that Spotify will lay off 6% of the workforce, that is, 600 employees.
this same week. These layoffs are in addition to those already carried out in October 2022 at the Gimlet Media and Parcast podcast studios, in which 38 jobs were eliminated. Now, the sponsoring company of Barcelona Football Club seems to be following in the footsteps of other large technology companies such as Meta, Amazon or Google: it will fire a part of almost 10,000 employees.
Difficulties despite subscribers. As for other companies in the technology sector, 2022 has not been the best year for the multimedia services firm. According to Nasdaq, its shares fell 66% and noted in a post published on January 18 that the company “is adding millions of subscribers, but finds it difficult to increase profit margins while paying large amounts of money to attract creators.”
Big investments in podcasts. In this sense, it should be noted that the firm has invested, between 2019 and 2022, more than one billion dollars in the purchase of “non-musical businesses”, according to calculations by Music Business Worldwide. In addition, the firm has spent $200 million on the Joe Rogan podcast (double what the company was originally said to have paid), $25 million on the Obamas’ podcast, and $30 million on the Prince Harry and Meghan Markle podcast.
A complex context. Elements such as the energy crisis, inflation, the increase in interest rates by central banks and the fear of a recession have altered the economic landscape, and as a consequence, many companies in the technology industry have been affected. There are also other causes that explain this situation, such as the change in Apple’s privacy policy, which has reduced the advertising revenue of many technology firms, according to Zoe Klienmann, a BBC journalist.
On the other hand, the intention of the US government to impose greater control on technology companies has generated concern in these firms, according to Enrique Dans, a professor at IE Business School, in November 2022 in statements for Cadena Ser.
Image: Spotify
