As a result of the global economic inflation slowing catching on to every business, Spotify, an audio streaming platform is laying off approximately 600 employees from the organization. This is about 6% of its workforce.
As of September 2022, the organization had over 9,800 full-time employees. But as a result of reining in cost, the organization has decided to let go of 6% of its workforce.
Over the months the organization has tried various other means to reduce costs. As such, this layoff is an extreme but not surprising way for doing such.
These layoffs affect hundreds of employees in an organizational restructure that will ultimately increase efficiency, lower costs, and speed up decision-making.
The affected employees will receive severance pay which will vary on the notice period requirements in their location, as well as their length of employment. Typically, employees in Spotify are to receive five months of severance pay.
The organization also intends to pay out the affected employees’ vacation accrued and unused. They have said that healthcare coverage will still be maintained throughout this severance period. Spotify will also help these affected people with immigration and career issues.
Google’s parent company, Alphabet also announced that they would cut off roughly 6% of their global workforce. This is approximately 12,000 jobs. The reason for this laying off is to reduce its headcount due to concerns about a broader economic slowdown.
The management explained that the company had expanded too fast during the 2020 pandemic with the high demand for digital services.
Presently, Google wants to focus on products and technology that are essential for the future. One of these technologies is artificial intelligence.
The layoffs will affect all departments, functions, levels of responsibility, and regions. It will begin in the US and consequently reach other countries from there.
Google will provide 16 weeks of severance pay to US-based employees, their bonuses for 2022, paid vacation, and six months of health coverage.
This news came just days after Microsoft and Amazon announced that they have laid off thousands of their employees respectively.