In an internal memo sent to its employees, Daniel Ek, the CEO of Spotify, announced that the company would slow recruitment by 25%. The Swedish giant is far from being the first firm in the tech sector to make such a decision; in question, the possible recession that is looming.
A slowdown in recruitment, but not in development
Spotify is emerging from a large recruitment campaign, particularly within its research and development teams, and now has more than 8,000 employees worldwide. However, she has decided to hire more cautiously, even though Daniel Ek promises that she ” will continue to recruit and develop ».
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« We’re just going to slow that pace and be a little more cautious with the absolute level of new hires over the next few quarters. “, he added.
The comments line up with statements made by Spotify CFO Paul Vogel at an event for the company’s shareholders last week, the company’s first since going public there. four years old: We are clearly aware of the growing uncertainty regarding the global economy. And while we have yet to see a significant impact on our business, we are closely monitoring the situation and evaluating our near-term headcount growth. ».
Spotify thinks big despite the economic situation
Despite the uncertainty of the economic situation, Spotify is thinking big and is aiming for one billion users by 2030 and hopes to generate $100 billion in annual revenue with a gross margin of 40% by the end of the decade. At the event, the Swedish company’s executives laid out an ambitious vision for the company over the next few years, during which Daniel Ek envisions Spotify becoming ten times the size of its current size.
Despite the situation, Spotify is forecasting a decade of very strong growth. Photography: Patrik Michalicka / Unsplash
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« This is why we invest so aggressively to build not only a bigger business but also, we believe, a much more profitable business. “, did he declare. For years, Spotify has promised that priority will be given to investment and growth over profits, says the Wall Street Journal.
In this context, the slowdown in hiring seems to be more a form of caution than anything else, since the firm does indeed plan to continue its momentum and grow in the years to come, by investing in particular in the field of audio books. .
The tech sector in the post-pandemic context
This decision is not surprising. For several months, the tech sector has been plagued by numerous layoffs. Having largely benefited from the pandemic, it is now experiencing a period of less significant growth, in addition to the very tense global geopolitical and economic contexts.
Netflix has announced the layoff of 150 employees, while PayPal has also let several of its employees go. Many other technology giants like Twitter, Meta or Microsoft have chosen the same approach as Spotify by slowing down recruitment. For his part, Elon Musk has planned to reduce the workforce of Tesla by 10% because of a ” very bad feeling on the state of the global economy.
It was expected, and the post-pandemic effect is coming to an end, accompanied by a war in Ukraine which is also strongly impacting a whole section of the technology sector.
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