Popular music streaming app Spotify may get a price hike soon as the company is struggling to control expenses amid the global economic decline. The company just cut off 6% of its total staff, which made up around 600 employees in total.
Spotify CEO Daniel Elk has clearly stated that the streaming platform is in hot waters at the moment. He commented on the company’s layoff announcement saying:
In 2022, the growth of Spotify’s operating expenses outpaced our revenue growth by two times the situation is unsustainable in the long-term in any climate.
The executive’s statement could be an indicator that pricing plans for the service, which have stayed relatively stable in the past, may see a hike in the near future to keep up with rising expenses and falling revenues.
As reported by Variety in the past, Elk stated back in October 2022 that the price increase “is one of the things we would like to do and it’s something we will [discuss] with our label partners.”
This is not the first time Spotify has looked toward cost-cutting strategies. In an effort to reduce expenses, Spotify made content cuts in the past.
In October 2022, the company eliminated 11 original podcasts, mostly from the Gimlet and Parcast studios which it had acquired as part of its ambitious expansion into the podcasting industry.
Spotify invested billions of dollars in its podcast business, including a $200 million contract for Joe Rogan, the platform’s top performer. Even some of these had to be removed from the platform following a controversy involving the host Joe Rogan himself.
It is uncertain how Spotify’s challenges will impact future pricing, but typically, subscription fees for top music streaming services are increasing, so the future is not looking good at the moment.