1500 Employees Wrap Up Their Time with Spotify in Its Third Round of Layoffs this Year

In a worrying trend that doesn’t seem to be coming to an end anytime soon, another major tech company is looking to lay off a reasonable chunk of its workforce to manage operational costs.

For the third time this year, the shoe fits Spotify.

Yikes!

After two rounds of layoffs earlier in the year, the music-streaming giant looks to let go of 1500 additional employees from the 8,800 people on its roster. i.e. about 17% of its current workforce. This comes on the back of a 600-person-strong downsizing in January and another round of layoffs that saw 200 members of staff exit the company in June.

In a note to employees, later published on the audio company’s blog, CEO Daniel Ek cited rising capital costs as one reason for the reduction in headcount.

“In 2020 and 2021, we took advantage of the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing, and new verticals. These investments generally worked, contributing to Spotify’s increased output and the platform’s robust growth this past year. However, we now find ourselves in a very different environment. And despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big.”

For anyone who took a look at the company’s q3 earnings report and considers a 17% downsize excessive, the Spotify CEO agrees with you. At least up to a point. In reference to the drastic nature of the company’s latest round of layoffs, Daniel Ek writes in his note to employees - “We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives.”

For context:  Spotify recorded upward trends in monthly users (26%), subscribers (16% Y/Y), and total revenue (11% Y/Y). Not to mention a gross margin that finished above guidance at 26.4%.

To ease the way for the swathe of talent getting terminated by the company, Spotify will incur between 130 and 145 million Euros in charges, including five months' worth of severance payment, as reported by Reuters.

The layoff trend continues to ravage industries globally, as 225,000 employees have seen the axe across a slew of Big Tech companies due to an increasingly volatile economy and changing consumer patterns. Unfortunately, the markets are a ruthless thing and appear to be rewarding this trend, as Spotify’s U.S listed shares climbed by 11 points, after the CEO’s note went out, to trade near its 2-year peak at close of day.

Source

Spotify holds a modest rank of #269 on this week’s HackerNoon Tech Company Rankings.

Netflix Secures Classic GTA Trilogy to Boost Its Gaming Efforts

By now it’s no news that Netflix, the predominantly video-streaming platform, has been dipping its feet into the video game industry. Following the release of its interactive film, Bandersnatch, in 2020, and subsequent interactive storytelling projects, the company has pushed further into the gaming market.

In November 2021, the streaming giant launched mobile gaming functionality to its subscribers worldwide. The initial push made five games available on mobile, including an offshoot of the platform's super-star title, Stranger Things.

Fast forward to August 2023, Netflix went a step further by rolling out its cloud-streamed games. Effectively extending of devices on which games were playable to include Smart TVs.

In the HackerNoon Technology Poll on the week of the announcement, we asked members of the community if they were interested in trying games on Netflix. The divided results saw 14% minority vote Yes. However, 24% of the respondents expressed uncertainty, waiting to see what kinds of games the platform would acquire.

If you were a part of that minority or perhaps share their sentiments, then Netflix’s latest video game title acquisition might be just the thing to push the needle for you.

Last week, the company announced, in a post shared by VP of Games Mike Verdu, that Rockstar’s golden goose is coming to the streaming platform.

Grand Theft Auto: The Trilogy—The Definitive Edition is coming to Netflix on December 14 for Netflix members on the App Store, Google Play, and in the Netflix mobile app.

I don’t know about you, but I do love me some GTA.

Acquiring a gaming title with a following of this size might just be the spark that Netflix games need to get to the next level. Especially when you consider the positive uproar that Rockstar’s trailer for its heavily anticipated Grand Theft Auto VI unleashed in gaming communities across social media.

It’s still too early to tell whether this acquisition is Netflix’s smoking gun, considering that the game titles are still available to play on more gaming-focused consoles. Nonetheless, it’s an exciting time for the gaming community.

Netflix sits pretty at #6 on this week’s HackerNoon Tech Company Rankings.

In Other News…

• Nvidia CEO will look to Japan first for AI Processors - via The Japan Times
• Crypto stocks enjoy uptick as Bitcoin crosses $40K mark - via Reuters
• OpenAI’s GPT store stalls till 2024 following leadership debacle - via Tech Crunch
• Intel wins appeal to overcome $2.18 billion VLSI patent verdict - via Reuters
• Instagram and Facebook cross-messaging is coming to an end - via The Verge

This brings us to the end of this week’s Tech Company News Brief.

Don’t forget to share this newsletter with your family, friends, and everyone in between!

See you next week!

-Asher Umerie, World News & SciFi Editor at HackerNoon

The Tech Company Brief is a weekly newsletter written by HackerNoon editors to help you dissect the last week in tech news! Subscribe here for the full scoop delivered straight to your inbox: https://hackernoon.com/tech-company-brief