Spotify Announces Third Round of Layoffs, Cutting 1,500 Employees
Updated: Jan 5, 2024
Music streaming giant Spotify has announced its plans to lay off approximately 1,500 employees, which accounts for 17% of its workforce.
This comes after the company let go of 600 staff members in January and another 200 in June. The decision to reduce the workforce is aimed at reducing costs and improving efficiency.
Following the trend set by other tech companies, Spotify's move to downsize its workforce reflects the need for streamlining operations and optimising resources. In a letter to employees, Spotify CEO Daniel Ek explained that the company had hired more staff in recent years due to the lower cost of capital, but now it needs to focus on being both productive and efficient.
Spotify has invested heavily in its podcast business, spending over a billion dollars and signing deals with high-profile celebrities like Kim Kardashian, Prince Harry and Meghan Markle. The company has also expanded its market presence globally, aiming to reach a billion users by 2030. Currently, Spotify boasts 601 million users, a significant increase from the end of 2020.
Despite reporting a profit in the third quarter, Spotify is taking proactive measures to align its financial goals with operational costs. The affected employees will receive severance pay, vacation pay and healthcare coverage for the severance period. The company will also provide immigration support to employees whose immigration status is tied to their employment.
Spotify's decision to reduce its workforce by 1,500 employees, or 17% of its headcount, reflects the need for cost reduction and improved efficiency.
The company had previously laid off 600 employees in January and 200 more in June.
Spotify's expansion into the podcast industry and global market presence has contributed to its increased workforce.
Despite reporting a profit in the third quarter, the company aims to optimise resources and align financial goals with operational costs.
Affected employees will receive severance pay, vacation pay and healthcare coverage for the severance period.
Source: REUTERS