Audio streaming platform Spotify is preparing to lay off 17% of its workforce or about 1,500 employees, the Wall Street Journal reports.
CEO Daniel Ek announced the job cuts, which are the third round of layoffs this year, to staff on Monday.
“The Spotify of tomorrow must be defined by being relentlessly resourceful in the ways we operate, innovate, and tackle problems,” he said in a 1,000-word letter to staff. “Being lean is not just an option but a necessity.”
The move is part of an effort to scale back the Swedish-based company’s $1 billion bet on podcasting, the Journal noted.
In Monday’s letter, Ek said substantial cuts were the best option for accomplishing the company’s objectives and thanked laid-off employees for their help growing the company.
“To be blunt, many smart, talented and hard-working people will be departing us,” he said. The average employee will receive five months of severance pay.
A leaner structure will change the way Spotify employees work and allow the company to invest profits more strategically back into the business, Ek said.
The restructuring marks Spotify’s third round of significant layoffs this year. In January, the company said it would lay off about 600 employees, or 6% of staff. In June, it announced plans to trim an additional 200 jobs, or 2% of its workforce.
Teamsters Strike at DHL’s Cincinnati Air Cargo Hub
More than 1,100 union workers at DHL’s air cargo hub at the Cincinnati/Northern Kentucky International Airport walked off the job Thursday, the Wall Street Journal reports.
The strike comes amid the parcel carrier’s busiest time of year at one of its largest logistics facilities.
The International Brotherhood of Teamsters said its members are protesting unfair labor practices at the hub run by DHL Express, a U.S. unit of German logistics giant Deutsche Post that handles express parcel business.
DHL Express said the company anticipated the job action and has enacted contingency plans such as bringing on replacement staff and moving flights and volume to other DHL locations across the U.S.
The DHL job action comes as workers across the U.S. from package-delivery drivers to warehouse staff have called for better pay and recognition for showing up through the COVID-19 pandemic when other employees could work remotely. A series of labor agreements reached this year has delivered big wage increases, including for auto workers, airline pilots and dockworkers at West Coast ports.
U.S. Economy Adds 199,000 Jobs in November
The unemployment rate fell unexpectedly in November in a sign that the labor market might not be cooling as quickly as economists initially thought, according to the U.S. Department of Labor’s jobs report on Friday.
The unemployment rate was 3.7% for the month, down from 3.9%, while the economy added 199,000 jobs, an uptick from the 150,000 in October. Wages increased 0.4% on a monthly basis and 4.1% over last year.
Meanwhile, labor force participation rate ticked higher to 62.8%, up from 62.7% the month prior. The largest job increases in Friday’s report were seen in healthcare (77,000), while government employment rose by 49,000 and leisure and hospitality rose by 40,000.
Data released earlier this week had shown signs of a cooling labor market. On Tuesday, the latest Job Openings and Labor Turnover Survey, or JOLTS report, revealed the ratio of job openings to the number of unemployed workers fell to 1.34, its lowest reading since August 2021.
Additional labor market data out Wednesday from ADP showed private payrolls increased more slowly than expected last month and wages continued to fall. Specifically, ADP noted that the drop in leisure and hospitality jobs in November could be a sign of the labor market normalizing, and therefore indicating payroll growth could eventually slow next year.
“Restaurants and hotels were the biggest job creators during the post-pandemic recovery,” said Nela Richardson, chief economist at ADP. “But that boost is behind us, and the return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024.”
Indeed Scraps Mental Health Days
Indeed Inc., the online job-search company, is canceling the monthly mental health days it introduced during the pandemic, Bloomberg News reports.
The company joins a growing list of companies that are paring back benefits they implemented during the COVID-19 pandemic. Indeed initiated “YOU Days” in June 2020, giving all employees the same day off each month at a time when exhausted staff were taking fewer vacation days because of travel restrictions.
Three years later, employees are once again booking time off at a similar rate to before the pandemic. “As a result, we have agreed that the global need for YOU Days has passed,” a company spokesperson told Bloomberg.
Indeed’s move follows a decision earlier this year to cut 2,200 jobs, or about 15% of its total workforce.
The Austin, Texas-based business isn’t alone in reevaluating its offerings. Elon Musk last year scratched monthly, company-wide “days of rest” at his social media platform, X. And many companies that rushed to provide additional hazard pay and paid sick leave to frontline workers ended those offerings in 2020 after a few months. Starbucks Corp. ended its expanded COVID-19 sick pay for baristas last year.
Indeed, owned by Tokyo-based internet and staffing company Recruit Holdings Co., will continue to provide unlimited paid time off for employees and offers them the option of working fully remote if they choose, according to its spokesperson. It also recently extended its parental leave benefit to 26 weeks from 16 weeks, the company said.
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