The music streaming app has said it needs to cut costs as operating expenses outpace revenues. The cuts are the latest in a string of mass layoffs in the tech world as the pandemic-fueled growth boom comes to an end. Music streaming giant Spotify announced on Monday it was cutting 600 jobs, or up 6% of its global workforce, joining other tech giants who have been forced to downsize. The Stockholm-based company, which employs nearly 10,000, intends to reshuffle its management as part of the revamp in an effort to narrow the gap between its operating costs and revenues. CEO Daniel Ek said last year saw operating costs grow to double the revenues. "In hindsight, I was too ambitious in investing ahead of our revenue growth." Ek said on Spotify's official blog. "I take full accountability for the moves that got us here today." Did Spotify grow too fast? Like many other tech companies, Spotify expanded its workforce to cater to the exponential increase in demand during pandemic lockdowns. In 2017, Spotify employed around 3,000 staffers. Its workforce more than tripled in the years that followed, reaching some 9,800 by the end of 2022. Its spending didn't only pour into salaries but also into product investment, as the app spent over a billion dollars to acquire exclusive podcasts. The gap between the spending and revenue "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," Ek said. In recent months, as the slowed global economy has punished advertising worldwide, tech giants such as Amazon, Meta, Google and Microsoft have also announced sweeping job cuts.

Chinese smartphone giant Xiaomi, which has an ambitious goal of unseating iPhone maker Apple from the No 1 spot globally by 2024, has started laying off workers in multiple departments, according to social media posts by affected employees and local Chinese media reports. In China, lay-offs are often conducted in the name of “business optimisation” to avoid scrutiny by labour authorities. Lay-offs affecting more than 20 jobs must be referred to the government under China’s labour law. A Xiaomi representative said in a statement on Tuesday that the company has implemented “routine personnel optimisation and organisational streamlining” with “less than 10 per cent of the total workforce” affected. Xiaomi had 35,314 employees as of September 30, with more than 32,000 in mainland China, according to its third-quarter financial results. Xiaomi will cut jobs in several units of its smartphone and internet services business, according to a report by Chinese media outlet Jiemian, an online publication affiliated with Shanghai United Media Group. The report said laid-off workers were given redundancy packages, adding that the move may reduce Xiaomi’s payroll by about 15 per cent. The Beijing-based company began trimming workers this year amid weaker sales due to China’s Covid-19 lockdowns and slower consumer spending. The latest move could affect thousands of workers, many of whom have just joined the company during a hiring spree that began in December last year. China’s social media platforms, including Weibo, Xiaohongshu and Maimai, have been flooded with posts about the reported Xiaomi job cuts, injecting a fresh sense of anxiety over the future of China’s tech sector. The news comes just days after Xiaomi founder Lei Jun unveiled the company’s new flagship 13-series smartphones, powered by the Qualcomm Snapdragon chipset, despite weakness in the consumer electronics market due to a sluggish Chinese economy. In the third quarter, global smartphone shipments fell 9 per cent year on year to 297.8 million units, with shipments in China down 11 per cent to 70 million units in the same period, according to market research firm Canalys. China’s closely-monitored retails sales, a broader gauge of consumption, were down 5.9 per cent year on year in November. Consumer goods excluding cars declined by 6.1 per cent, an indicator of widespread consumption weakness in the world’s second-largest economy which ended draconian Covid-19 controls and lockdowns after angry protests across the country. Xiaomi, the fifth-largest smartphone vendor in the Chinese market with a 13 per cent market share in the September quarter, saw its revenue decline by 9.7 per cent year on year to 70.47 billion yuan (US$10.1 billion) in the three months ended September 30, while net profits dropped by 59.1 per cent to 2.21 billion yuan. 

The digital acceleration in India has created tremendous growth opportunities for India’s technology companies because of the Covid-19. Holding the same thought, Nandan Nilekani, non-executive chairman of Infosys  said that the number of people working in IT services and BPO industry is estimated to double in the next couple of years to around 9-10 million. Talking about how India is at a really bright spot in the digital story, Nilekani explained three developments which are going to have an impact on India's growth and economic recovery.Starting with the growth of technology companies in India, he said, “People like Satya Nadella have said that the world spending on technology is going to move from 5% of GDP to 10% of GDP globally in the next decade or so. Which means there's going to be a huge amount of investment of technology and people into digital transformation. And in India, Indian companies are benefiting from that.” He also hailed the growing amount of activity in the startup ecosystem in the country, which is also leading to massive job opportunities in the tech industry. “There's a huge amount of activity in the startup ecosystem and it's estimated that the number of people in the IT services and BPO industry are about 4.5 million, and that is expected to double in the next several years. Imagine, it took us about 14 years to get to about 4.5 million people, but doubling that to 9-10 million will happen in maybe a decade,” he said at ASCENT eConclave. He added that in the tech industry, every job recruiter creates four or five jobs in ancillary industries, such as transportation, food, and real estate. Adding to India’s encouraging digital story, he said that India has the best digital public infrastructure in the world. Nilekani, who headed the project of UIDAI, proudly talked about the impact of creating almost 1.3 billion digital identities and the success of UPI. “The UPI was launched barely five years back in May 2016. By October 2016, it reached about 100,000 transactions. However, in October, it did over 4.3 billion transactions and has a total transaction value of $100 billion. So, this has had a dramatic impact. Today, when I go out, every vegetable seller, every coconut seller, every small shop is taking UPI payments, and that's really been a revolution,” he said. The third development he mentioned, which will also impact the recovery, is the account aggregator network. He explained that users will be empowered with their own data and there will be many use cases for that, the first big being lending. “Borrowers, big businesses or individuals will be able to use their own digital footprint and get access to credit. So, if I'm a small business, I can use the data of my purchases, or my sales or my taxes paid and share the data with the lender securely. And the lender can make an instant decision to give me a loan. Right now, that system is doing a few 1000 transactions, but there's no reason why in a few years, it won't do millions of transactions in a day,” he said. He added that this will completely change the economy because unlike in the old model where a few large companies got credit with this model, every small kirana store or a dispensary, or manufacturing company, will get credit. This, in turn, will drive job creation and economic growth. Source: The Economic Times