Spotify Technology SA announced to reduce hiring by 25.00% due to the broad macroeconomic uncertainties. The world’s largest on-demand audio streaming firm is the latest technology company to curb expenses amid the headwinds.
Chief Executive Officer Daniel Ek informed the staff that the business would continue hiring at a slower pace. The company currently operates with 8,230 people worldwide.
Correspondingly, shares of Spotify surged 7.45% or 7.30 points to $105.35 per share, reaching a session high. Then, it added 0.62% or 0.65 points to $106.00 per share after the bell on Wednesday.
Earlier this month, the business alerted the investment community that the company strictly monitors the global economy. It kept an eye close on the situation, evaluating their headcount growth in the near term.
Nevertheless, Spotify offered investors an upbeat assessment of its business. The firm anticipated investing in podcasting and audiobooks to fuel growth over the next decade. Moreover, the business joins several companies that have slowed hiring in response to rising inflation.
For instance, the cryptocurrency exchange Coinbase unveiled its plan to decrease its workforce by 18.00%, or about 1,000 people. In addition, Spotify followed ride-hailing companies Uber and Lyft, which have slowed the pace of hiring.
Spotify stocks receive Wells Fargo upgrade
The recent upward trend of Spotify shares benefited from the upgrade given by the Wells Fargo analysts yesterday. They changed the stock to Equal Weight from Underweight, increasing the price target from $101.00 to $124.00 per share.
Experts explained that the bullish outlook comes after the recent Investor Day, which yielded a more profitable path for the firm.
CEO Ek cited that the company currently performs better than expected, highlighting the overall gross margin of 25.50%. The tech firm also approaches the long-term goal of 30.00 to 35.00%.
Furthermore, Spotify plans to add new content over the next decade, increasing its average revenue per user. Meanwhile, analysts anticipated the platform to reach its goal of 1.00 billion users by 2030.