Spotify cuts two percent of its workforce. Credit: Chubo – my masterpiece / Shutterstock.com.

Spotify is the latest US tech company to cut its workforce as companies strive for economic efficiency gains. Sahar Elhabashi, vice president at Spotify announced a “strategic realignment” of the company by reducing its workforce by 200 employees or two percent of Spotify’s workforce.

Elhabashi, who is also Spotify’s head of podcast business, announced that the company had reached the “next phase” of its “podcast strategy”.

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The company has chosen to pivot “from a more uniform proposition…to support the creator community better,” Elhabashi wrote.

In the last three years, Spotify has invested heavily in its podcast unit.  According to an SEC filing, the digital audio content platform spent $526m on four acquisitions to strengthen its podcast business.

The “next phase” will involve the continuation of podcast services, including Ringer, and the integration of podcast companies Parcast and Gimlet.

In 2020, the company announced the Spotify Audience Network, an audio-first ad marketplace and the launch of Streaming Ad Insertion.

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The news of Spotify’s job cuts follows a string of lay-offs by large tech companies beginning in 2022.

The pandemic saw significant increases in e-commerce volume and social media subscriber numbers.

But the global economic downturn has prompted concerns of an impending implosion of what some consider a tech bubble: tech shares are down by more than a third this year while private start-ups are struggling for funding.

Many industry experts believe that 2023 will continue to be a year of lay-offs for tech companies, with 300 companies having already cut 100,000 staff globally since January, according to data from Layoffs.fyi.