‘Unemployed before holidays yet again’: Engineer, hit by Twitter turmoil, faces fresh layoff at Spotify

Music streaming behemoth Spotify announced on Monday a workforce reduction of approximately 1,500 employees, constituting 17% of its personnel. This move, aimed at cost reduction, follows previous layoffs of 600 staff members in January and an additional 200 in June. Only the recent layoffs happened before the holiday season. For one such affected individual, Freddie Carthy, the news of being let go from Spotify served as a painful reminder, considering his recent history.

Carthy had joined Spotify merely last year following a job loss at Twitter triggered by Elon Musk's takeover of the social media platform. Expressing his shock and confusion, Carthy took to X, previously known as Twitter, to share his sentiments about being impacted by Spotify's layoffs.

His decision to leave Twitter a year ago stemmed from the company's announcement of mass layoffs following Musk's takeover. Seeking stability, Carthy ventured into Spotify as a Senior Web Engineer, only to face the unsettling irony of losing his job once more, right before the festive season.

Carthy's candid reflections captured the ironic parallel: 1 year ago, Twitter s**t the bed and I quit, right before the holidays. 1 year later, I find myself unemployed before the holidays yet again...”

Criticism swiftly ensued on social media in response to Spotify's timing of such substantial layoffs, particularly in the lead-up to Christmas. This decision attracted further scrutiny, especially given the backdrop of Spotify's recent rare quarterly net profit of 65 million euros in October and its impressive 26% surge in active users, totalling 574 million for the third quarter.

As a result of the layoffs, its US-listed shares surged by roughly 11%, edging close to their two-year peak of $200.46 during early trading. Following earlier workforce cuts within the tech sector at the beginning of the year, several companies have initiated new rounds of staff reductions. This trend has seen announcements from industry giants like Amazon and Microsoft-owned LinkedIn.

In a message addressed to the staff, Spotify's CEO Daniel Ek highlighted the company's ramped-up hiring during 2020 and 2021, largely influenced by lower capital costs. While the company's output expanded during this period, much of it was attributed to having a surplus of resources.

Regarding the layoffs, Spotify anticipates incurring charges of approximately 130 million to 145 million euros in the fourth quarter. Notably, the majority of the cash component of these charges will be accounted for in the first and second fiscal quarters of 2024.

Spotify's strategic investments have encompassed over a billion dollars towards bolstering its podcast business. Additionally, it has secured deals with high-profile personalities such as Kim Kardashian, Prince Harry, and Meghan Markle. The company has also expanded its market presence across most global regions in pursuit of reaching a billion users by 2030.

In the third quarter, Spotify marked a return to profitability, facilitated by price increases in its streaming services and substantial growth in subscribers across all regions. The company's forecast predicts a rise in monthly listeners, expecting to reach 601 million in the forthcoming holiday quarter.

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