“Like many other leaders, I hoped to sustain the strong tailwinds from the pandemic and believed that our broad global business and lower risk to the impact of a slowdown in ads would insulate us,” CEO Daniel Ek said in a note to employees.

“In hindsight, I was too ambitious in investing ahead of our revenue growth. And for this reason, today, we are reducing our employee base by about 6% across the company. I take full accountability for the moves that got us here today,” he added.

Spotify laid off 38 staff from its Gimlet Media and Parcast podcast studios in October. The music streaming giant has about 9,800 employees.

Affected employees will be informed “over the next several hours” and will receive an average of five months of severance pay, during which time the company will continue to cover their healthcare costs, Spotify said.

The affected employees will receive approximately five months of severance based on local notice period requirements and employee tenure. They will also be covered under healthcare benefits during their severance period.

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All accrued and unused vacation will be paid out to any departing employee, the company added.It will also assist employees whose immigration status is connected with their employment.

Spotify joins several major companies that have announced layoffs in response to reduced advertising revenue and a shaky economic outlook.

Amazon, Meta and Microsoft and Google are among the tech giants that have announced staff reductions recently. The search giant said on Friday it will cut about 12,000 jobs, or more than 6% of its global workforce.

Ek announced the layoffs as part of an organisational restructure aimed at increasing efficiency, reducing costs, and speeding up decision-making.

“As part of this effort, and to bring our costs more in line, we’ve made the difficult but necessary decision to reduce our number of employees,” he said.

One of the highest profile departures is content and ad business chief Dawn Ostroff, who Ek credited with increasing Spotify’s podcast content by “40x”. Dawn will assume the role of senior advisor to help facilitate this transition.

“Because of her efforts, Spotify grew our podcast content by 40x, drove significant innovation in the medium and became the leading music and podcast service in many markets,” Ek said.

He added, “in 2022, the growth of Spotify’s OPEX outpaced our revenue growth by 2x. That would have been unsustainable long-term in any climate, but with a challenging macro environment, it would be even more difficult to close the gap. As you are well aware, over the last few months we’ve made a considerable effort to rein-in costs, but it simply hasn’t been enough.“