Spotify is reducing its hiring plans by 25% amid broader economic uncertainty, according to a companywide memo sent by chief exec Daniel Ek on Wednesday.
Spotify will “reduce hiring growth by 25%,” according to Ek’s memo, as confirmed by a source. The email also said the company will “continue to still hire and grow” but that “we are just going to slow that pace and be a bit more prudent with the absolute level of new hires over the next few quarters.”
As of the end of March, Spotify said it had 8,230 full-time employees globally.
At the streamer’s 2022 investor day event last week, Spotify CFO Paul Vogel said that, amid macroeconomic headwinds like inflation, the company was evaluating its headcount growth in the “near term.”
“We are clearly aware of the increasing uncertainty regarding the global economy,” Vogel said. “And while we have yet to see any material impact to our business, we are keeping a close eye on the situation and evaluating our headcount growth in the near term.”
Spotify expects to exceed 1 billion users worldwide by 2030, more than double from 422 million as of the end of the first quarter of 2022, company execs told investors last week.
During the first quarter of 2022, Spotify added 2 million Premium subscribers to reach 182 million, lower that the expected 3 million net adds on the paid-user front. The decline included a loss of about 1.5 million Premium subs stemming from the company’s ceasing operations in Russia — and, according to Spotify, excluding Russia, paid user growth was above expectations. Spotify topped forecasts for overall monthly users (both free and paid).
For Q2, Spotify forecast growing to 187 million paid subscribers, which was below Wall Street expectations of 188.9 million for the period, per FactSet.
