Spotify is the latest tech company to lay off employees as a cost-cutting measure. According to a public note from Daniel Ek, co-founder and CEO of the Swedish audio streaming platform, approximately 17% of the workforce will be reduced.
A quick calculation based on the latest quarterly report reveals that this is approximately 1,500 of the total 9,241 employees worldwide.
This is the third time Spotify has laid off employees, in addition to raising the prices of its Premium subscription service. 600 people were released in January, while another 200 from the Podcast division were released in July.
The executive said that possible smaller reductions were discussed during 2024 and 2025, but the gap between the financial target status and current operating costs leads to the current decision.
Spotify’s headcount increased “significantly” in 2020 and 2021, the note said. The Wall Street Journal noted that employees nearly doubled as the company aimed to improve its content, marketing and “new verticals.” The subsequent 2022 and 2023 were more productive, but Spotify failed to become more efficient, pushing Ek and the company to drastic measures.
Each employee who is released will receive severance pay equal to approximately five monthly salaries and accrued and unused PTO will be paid. Health care will be provided during the layoff period and employees will be able to work in a new place after two months.
Ek stressed that this will allow Spotify to have a “more targeted approach” and the staff shift is not a step backwards but a “strategic reorientation”. The remaining employees are supposed to be “relentlessly resourceful” in every way the company can operate in the future, tackle problems and innovate.
Start a new Thread