Spotify Announces Cutting Down On Employments, Company’s Shares Surge Significantly

For a while, the share prices for Spotify had been experiencing a tearing. The share prices for the company were not doing too well.

The company’s performance in the stock market had caught the attention of many investors lately.

However, it was not a positive thing because all they could see was the company demonstrating a negative performance in the stock market.

The Situation has changed

Now, it turns out that the situation has changed for Spotify in the recent trading sessions. The investors are looking at green figures when they look at the recent sessions that have taken place.

If it is not the recent sessions, it is definitely the latest trading session that has caught the attention of all investors.

The shares for the company had demonstrated a strong performance, which is constantly placing the company in the spotlight.

Spotify’s Performance in the Stock Market

The data shows that the share prices for the music-streaming firm had surged over 2% as the latest trading session came to a close.

However, the midday report from Monday’s trading session shows that the share prices for Spotify had surged over 6%.

What Caused the Boost?

The share prices for the company went up right after its officials announced that they were cutting down on their headcount.

The officials announced that they will be reducing their users in the upcoming days. It was devastating news that the company officials had to make for the employees.

However, it was promising news for the shareholders who got assurance from Spotify that it was taking the right actions to cut down on costs.

This would ensure that the company would be able to become more profitable and incur fewer resources in the upcoming quarters.

6% Headcount to be reduced

The officials at the music-streaming company have confirmed that they will be letting go of 6% of their total headcount.

They have confirmed that it is going to be their global workforce that will be going through the reduction. They have not selected a particular region or area where the reduction will be made.

Instead, they will be reducing the headcount on a global scale. In terms of numbers, Spotify is planning to cut down on 600 jobs.

They have already decided that they will be giving out severance packages to the employees that they will be letting go of.

According to the company’s estimates, the current quarter’s earnings would reflect the severance charges that may be as much as $40 million.

Dawn Ostroff Leaves Spotify

In addition to the above, Spotify has announced that they will be making changes to their senior management. They have started making the changes with Dawn Ostroff, the chief content officer at Spotify.

They have confirmed that they are introducing a restructuring in their senior management, and unfortunately, Dawn Ostroff will be leaving the group.

As the company dropped the news, it caught fire and spread all over the news. The company’s decision to reduction and remove Dawn Ostroff had the investors all excited.

They turned to Spotify and started to make decent investments, which eventually, pushed the company’s share prices much higher.

Other Tech Companies are doing the same

Spotify is not the only tech company that has taken a difficult step at a difficult time. Other major tech companies are also following the same trend.

They are also eager to make changes and reduce their costs. For this purpose, they have started to reduce their headcounts.

So far, major companies such as Amazon, Microsoft, Google, and Meta have announced reductions in their headcounts.

Despite the recent push, Spotify shares are still 74% below their all-time high share prices.

The company has communicated that they are also preparing for the recession they think is about to hit the US in 2023.

They want to make sure that they make it through the hard times without facing any major hiccups.