Spotify announced it is laying off 6% of its workforce globally. The reason is that, the company is struggling with a gloomy economic environment in which consumers and advertisers are cutting back on spending.

The unexpected news is that chief content officer and head of advertising Dawn Ostroff is also leaving.

Spotify employs around 9,800 people in total, which means the cuts affect around 600 employees. According to the company’s LinkedIn profile, it employs 5,400 people in the US and 1,900 in Sweden.

Spotify faces the challenge of contending with sluggish ad spending expected this year as the media suffers the effects of the economic recession.

In the third quarter of last year, the music streaming platform reported that operating ad revenue was 19% higher than in 2021. The paid subscriber base grew 13% to 195 million, but share prices have since fallen, hinting at broader industry concerns.

Spotify CEO Daniel Ek said that the growth in operating expenses for FY22 has exceeded revenue by double and described this situation as “intolerable”.

He also laid out the “need for Spotify to become more efficient” while praising Ostroff’s contribution to the company. Among Ostroff’s accomplishments is praise for the significant expansion of Spotify’s podcast catalog.

The good news is that laid-off employees will receive an average of five months’ severance pay. Immigration assistance will be available to workers whose immigration status is linked to their employment.

The company warned in a filing with the Securities and Exchange Commission that paying the benefits would result in severance-related costs of about 35 million euros ($38 million) to 45 million euros.

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