OAN’s James Meyers
9:18 AM – Monday, December 4, 2023
The music streaming platform Spotify has announced a third round of layoffs in 2023.
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CEO Daniel Ek announced on Monday that the company will lay off almost 1,500 employees, or 17% of its workforce to reduce costs, calling it a “significant” strategy shift for Spotify.
The announcement comes after the music streaming titan let go of 600 workers in January and 200 in June of this year.
Ek said in a letter to employees that the company “put significant emphasis” on the growth of the company in 2021 and 2022, as the economy allowed it to do so, but “we now find ourselves in a very different environment.”
“While we’ve made worthy strides, as I’ve shared many times, we still have work to do. Economic growth has slowed dramatically and capital has become more expensive. Spotify is not an exception to these realities,” Ek said. “This brings me to a decision that will mean a significant step change for our company. To align Spotify with our future goals and ensure we are right-sized for the challenges ahead, I have made the difficult decision to reduce our total headcount by approximately 17% across the company.”
Additionally, Ek said, “I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance. We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives. While I am convinced this is the right action for our company, I also understand it will be incredibly painful for our team.”
However, Spotify added six million subscribers in the June-to-September period, which was over two million more than the company predicted, garnering a profit of $34.8 million in that time. That was up from a loss of $248 million in the same period last year, and has 226 million subscribers in total.
“We still have a ways to go before we are both productive and efficient… we have to become relentlessly resourceful,” Ek said.
“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.”
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By: OAN
