Spotify is the latest media-tech company to slow hiring
Fears of an economic downturn have prompted many media-tech businesses to make dramatic job cuts or ease hiring, and that appears to be spreading across the industry.
Why it matters: Companies are reevaluating their headcount and spending plans after adapting to consumer needs and finding opportunities for growth during the pandemic. Some startups defined it as a "right-size," but it remains to be seen what that means for the future.
Driving the news: Spotify CEO Daniel Ek emailed staffers Wednesday that the company would reduce hiring growth by 25%, Bloomberg first reported and Axios confirmed. It's not a hiring freeze but a significant slowdown.
- Twitter said last month that it was pausing. Netflix, Cameo, Clubhouse and Jellysmack have laid off staffers.
- Media brands including Food52, Wave Sports + Entertainment and Outside Media also laid off staff. Vice Media is slowing down hiring.
By the numbers: U.S. tech companies cut 4,044 jobs in May compared to 459 between January and April, according to global outplacement firm Challenger, Gray & Christmas, per Reuters. That's the highest monthly total since December 2020 had 5,253 job cuts.
Yes, but: Not every recent cutback has stemmed from economic uncertainty. Netflix's layoffs came after concerns from investors over its business model and long-term financial success.
- Warner Bros. Discovery is expected to cut up to 30% of its ad sales team as part of its cost-cutting plans from the merger, Sara Fischer reports.
The bottom line: Spotify CFO Paul Vogel had addressed the "increasing uncertainty regarding the global economy" at the company's Investor Day last week and noted that despite not seeing "material impact" on Spotify, it would be monitoring and reacting to the situation.