Spotify is cutting about 17% of jobs, its third round of layoffs this year, as music streaming appears to become "both productive and efficient."
In a note to employees on Monday, Spotify founder and CEO Daniel Ek said adjusting the size of the workforce is crucial for the company to meet “future challenges.” He cited slow economic growth and rising capital costs among the reasons for the employee cuts, and said the company took advantage of lower-cost capital in 2020 and 2021 to invest significantly in the business.
“I recognize that this will affect a number of people who have made valuable contributions. To be frank, many smart, talented and hard-working people will leave us,” he wrote in the note, which the company later was published on the blog.
Spotify employs about 10.000 people, meaning Monday's move will affect more than 1.500 employees. Affected employees will be notified later in the day, she said.
The new wave of layoffs comes after Spotify will cut around 6% of jobs in June of this year and another hundreds of employees in January.
“I realize that to many, a reduction of this magnitude will seem surprisingly large, given the recent positive earnings report and our performance. We discuss making minor reductions throughout 2024 and 2025,” Ek wrote.
"However, considering the gap between our financial target statement and our current operating costs, I decided that substantial action to correct our costs was the best option to achieve our objectives."
