Spotify to Slow Its Hiring by 25%



SPOT -6.89%

Technology SA will slow its hiring by 25%, Chief Executive

Daniel Ek

told employees in an email Wednesday, according to a person familiar with its contents.

The announcement, which echoes comments made by the streaming giant’s finance chief at Spotify’s investor day last week, is the latest signal that companies are bracing for a possible recession amid rising interest rates and soaring inflation.

Shares in the Stockholm-based company rose nearly 9% in afternoon trading Wednesday in New York.

The company isn’t laying anyone off, according to a person familiar with the matter, and the slowdown comes after a hiring spree, largely for its R&D team, over the past year. Spotify has more than 8,000 employees around the world.

In the email to staff, Mr. Ek said that Spotify will “continue to still hire and grow,” and that “we are just going to slow that pace and be a bit more prudent with the absolute level of new hires over the next few quarters.”

Federal Reserve Chairman Jerome Powell said the central bank’s goal is to reduce inflation to 2%. The Fed approved a 0.75-percentage-point rate rise Wednesday, the largest interest rate increase since 1994. Photo: Elizabeth Frantz/Reuters

At its first investor day since going public four years ago, Spotify defended the company’s strategy Wednesday and outlined plans to expand into new businesses to address investors’ fears that the audio market—where Spotify has said it wants to dominate—is limited.

Executives laid out an ambitious vision for the company over the next decade, one in which Mr. Ek envisions becoming a business 10 times its current size. “That’s why we’re investing so aggressively in building not only bigger but, we’re thinking, a much more profitable business,” he said in an interview last week.

For years, Spotify has said it would continue to prioritize investment and growth over profit, raising some concerns over the company’s margins. Mr. Ek said Spotify would reach one billion listeners by 2030, and generate $100 billion in revenue annually with a 40% gross margin.

During the presentation, Chief Financial Officer Paul Vogel said the company is aware of the “increasing uncertainty regarding the global economy.”

“While we have yet to see any material impact to our business—we are keeping a close eye on the situation and evaluating our head count growth in the near term,” he said.

Write to Anne Steele at [email protected]

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