Shares of Spotify Technology SA (NYSE: SPOT) ended slightly up on Monday after the music streaming company revealed plans of lowering its global headcount by 6.0%.
How many employees will be let go?
The announced layoff will affect roughly 600 of its employees and result in up to $49 million in related charges. In a note this morning, CEO Daniel Ek wrote:
I hoped to sustain strong tailwinds from pandemic and believed our broad global business and lower risk to the impact of a slowdown in ads would insulate us. In hindsight, I was too ambitious in investing ahead of our revenue growth.
The media company is set to report its Q4 results next week. Consensus is for it to lose $1.29 this quarter versus 24 cents only a year ago.
Spotify shares have gained 35% over the past month.
Is there upside left in Spotify shares?
Despite the surge in recent weeks, Oppenheimer’s Ari Wald is convinced that Spotify Technology SA could go further up moving forward. On CNBC’s “Power Lunch”, he said:
It’s a stock that has moved above its 200-day MA for the first time in a year. So long you’re above $99 support, the next key resistance comes in at $125. That’s the upside we’re thinking about over the coming weeks to months.
His constructive view is in line with Wall Street that also currently rates Spotify shares at “overweight”. Also on Monday, Spotify said its head of content, Dawn Ostroff was leaving the company.
Just days ago, Google-parent Alphabet Inc also announced plans of cutting 12,000 of its employees as Invezz reported here.
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