(NewsNation) — Spotify has joined the ranks of tech companies laying off workers as 2023 begins.
Spotify will cut roughly 6% of its workforce, which amounts to about 600 people. In a memo, CEO Daniel Elk took the blame for being overly ambitious and the company has faced a post-pandemic slowdown.
Stockholm-based Spotify had benefited from pandemic lockdowns because more people had sought out entertainment when they were stuck at home. Ek indicated that the company’s business model, which had long focused on growth, had to evolve.
The company’s operating costs last year grew at double its revenue growth, a gap that would be “unsustainable long-term” in any economic climate, but even more difficult to close with “a challenging macro environment,” he said.
Spotify made “considerable effort” to rein in the costs over the past few months, “but it simply hasn’t been enough,” he said.
Elk’s memo included a promise that employees would receive five months of severance pay, along with health care and immigration support for those who have visas tied to their job.
Spotify is just the latest tech company to announce layoffs after a hiring spree during the pandemic, where more people were using technology to do remote work and provide entertainment at home.
The Associated Press contributed to this report.