Music streaming service provider Spotify (NYSE:SPOT) has become the latest tech company to consider layoffs with a view to cutting costs. As per a Bloomberg report, the company is likely to announce the firings later this week.
It is worth highlighting that the company took several measures to manage its workforce in 2022. Spotify terminated about 5% of its podcast team in October, after canceling 11 original podcasts from the platform. Furthermore, the company reduced hiring goals by 25% during the year.
Last week, Alphabet’s (GOOGL) Google joined other tech giants, including Microsoft (MSFT) and Amazon (AMZN), in announcing massive headcount reductions. Google will slash about 6% of its global workforce, while Microsoft announced that it would lay off about 10,000 employees. AMZN is laying off around 18,000 employees.
The performance of tech companies remains impacted by high inflation, rising interest rates, economic uncertainty, and the high cost burden related to overstaffing during the pandemic. Given the continued presence of these factors, more layoff announcements can be expected this year.
Is SPOT a Good Buy?
SPOT stock has a Moderate Buy consensus rating based on 11 Buys and eight Holds. The average stock price target of $117.89 implies 20.4% upside potential. The stock has gained nearly 4% in the past three months.
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