Spotify to slow hiring by 25% amid economic uncertainty

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FILE PHOTO: A trader is reflected in a computer screen displaying the Spotify brand on the floor of the New York Stock Exchange in New York

By Dawn Chmielewski

(Reuters) -Spotify Technology SA will reduce its hiring by 25%, according to a source familiar with the contents of a companywide email, making it the latest tech company to curb expenses amid economic uncertainty.

Spotify Chief Executive Officer Daniel Ek informed the staff via email Wednesday that the world’s largest on-demand audio service would continue hiring, though it would slow the pace “and be a bit more prudent” of over the next few quarters. The company said it employs about 8,230 people worldwide.

Shares of the Stockholm-based company reached a session high shortly after Reuters and other media reported the news and were last up 7.1%.

Spotify Chief Financial Officer Paul Vogel alerted the investment community that the company was monitoring the global economy during an investor conference earlier this month. Although it had yet to see a material impact on business, he said, “We are keeping a close eye on the situation and evaluating our headcount growth in the near term.”

At the time, Spotify offered investors an upbeat assessment of its business, predicting that its investments in podcasting and audiobooks would fuel growth over the next decade.

Spotify joins a number of companies that have slowed hiring or announced layoffs in response to rising inflation and fallout from the Ukraine crisis. The cryptocurrency exchange Coinbase said it would cut its workforce by 18%, or about 1,000 people. Ride-hailing companies Uber and Lyft Inc have slowed the pace of hiring.

(Reporting by Dawn Chmielewski in Los Angeles; Editing by Lisa Shumaker)