Spotify is shedding 17% of its workforce within the fashionable music streaming service’s third spherical of layoffs this yr.
The cuts replicate the corporate’s efforts to regulate its workforce to maintain “profitability amid slowing financial progress,” Spotify CEO Daniel Ek mentioned Monday in a letter to workers. The publish did not specify what number of workers would lose their jobs, however a spokesperson confirmed that it quantities to about 1,500 individuals.
“Regardless of our efforts to scale back prices this previous yr, our value construction for the place we have to be remains to be too huge,” Ek mentioned within the letter.
The Stockholm, Sweden-based firm had used low cost financing to develop its enterprise and “invested considerably” in workers, content material and advertising in 2020 and 2021, a time when many tech firms had been ramping up their hiring, Spotify mentioned in its weblog publish.
However Ek indicated that the corporate was caught out as central banks began mountaineering rates of interest final yr, which may gradual financial progress. Each are posing a problem, he mentioned.
“We now discover ourselves in a really completely different atmosphere. And regardless of our efforts to scale back prices this previous yr, our value construction for the place we have to be remains to be too huge,” he mentioned.
Third spherical of cuts
This newest wave of layoffs marks Spotify’s third spherical of mass job cuts this yr. In January, the agency slashed 6% of jobs, bringing its workforce to 9,200 workers. Simply 4 months later, it reduce one other 2%, or 200 workers, largely in its podcasting division.
Spotify has struggled to attain profitability, posting a internet loss this yr of roughly $500 million for the 9 months to September, regardless of rising its month-to-month energetic customers to 574 million within the third quarter of 2023, the corporate’s monetary statements present.
Spotify shares rose 14 factors, or 7.5%, to $194.26 in morning commerce Monday. Regardless of its monetary losses, the corporate’s share value has greater than doubled this yr.
A slew of main tech firms, together with IBM, Snap, Google, Roku and Meta, amongst others, engaged in sweeping job cuts this yr, reversing a hiring spree that surged throughout the pandemic as tens of millions of People started working from house.
Microsoft in January introduced a 5% discount in its workforce, or about 11,000 employees throughout workplaces worldwide.
The Related Press contributed to this report.
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