- Spotify to cut 1,500 jobs in a cost-cutting move amid economic challenges
- CEO Daniel Ek cites economic slowdown, shifts focus to restore startup efficiency
- Despite recent subscriber growth, Spotify aims for strategic reorientation and increased productivity
Spotify CEO Daniel Ek announced a significant strategy shift for the music-streaming giant, revealing plans to lay off approximately 1,500 employees in a third round of job cuts this year.
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Source: X
“Economic growth has slowed dramatically, and capital has become more expensive. Spotify is not an exception to these realities.” Ek stated.
The company, with over 9,000 employees, aims to enhance efficiency and return to its startup roots after an expansive hiring spree failed to ensure consistent profitability.
In a letter to staff posted on the company’s website, Ek explained, “To be blunt, many smart, talented, and hard-working people will be departing us.”
The decision to make substantial job cuts was driven by the gap between financial goals and operational costs. Employees affected will undergo one-on-one meetings by the end of the day Tuesday and receive an average of five months of severance pay.
Spotify previously laid off over 500 employees in January and cut 200 employees from its podcasting unit in June. Ek acknowledged the company’s robust growth but noted a decline in efficiency and a deviation from the resourcefulness that characterized its early startup days.
Despite adding 6 million subscribers from June to September, Spotify’s profit was €32 million ($34.8 million), a modest improvement from the €228 million ($248 million) loss in the same period last year.
“This is not a step back; it’s a strategic reorientation… A reduction of this size will make it necessary to change the way we work, and we will share much more about what this will mean in the days and weeks ahead.” Ek emphasized
