Spotify Will Not Be The Last Consumer Tech Company To Make Significant Headcount Cuts
We have talked about the fact that more layoffs are coming in Q4 and especially in Q1 2024 after the New Year’s holiday. Spotify will not be the last Consumer Technology to make deep headcount cuts (Spotify announced a 17% headcount reduction today).
Frankly, Spotify is hanging on by a thread in my view. If Apple decided that it wants to play in the podcast space and compete with Spotify for original long-form content it would be game over for Spotify. I do not see how Spotify will differentiate from Apple Music nor YouTube Music. Spotify’s pockets are not sufficiently deep.
Further, teens gravitate to YouTube and TikTok, not Spotify. I’m not sure how well Spotify will age as the teen population cohort ages and increases in purchasing power. Spotify is not a top brand among that group. This does not mean that Spotify can’t get super lean and run a long-term profitable business. It simply will not be a growth business.