Shock decision from Spotify!

Spotify announced that it will lay off 1,600 people, citing a slowing economy and rising borrowing costs. Spotify's billionaire founder and CEO Daniel Ek announced that the company has decided to cut 17 percent of its workforce, the third and harshest wave of layoffs in 2023.

In a message posted on Spotify's website on Monday, Ek told employees that if they are affected by the cuts, they will receive a calendar invitation "for a one-on-one call from HR within the next two hours." Ek said Spotify benefited from cheap borrowing in 2020 and 2021, when central bankers sharply cut interest rates in response to the COVID-19 pandemic lockdowns, but that "we now find ourselves in a very different environment," writing that "despite our efforts to reduce costs over the past year, our cost structure is still too large for where we need to be."

Spotify reported that it had 9,400 employees at the end of the third quarter of 2023. The company had reduced the number of employees by 6 percent in January and by 2 percent in June.

Ek said laid-off employees will receive an average of five months severance pay plus unused vacation pay. Big tech companies from Meta and Microsoft to Amazon and Alphabet have made large-scale layoffs throughout 2023 after interest rates rose and investors focused on their ability to cut costs to protect profits.