Spotify set to lay off 17 percent of its team in a “hard but crucial step”
Following their most recent round of job cuts, Spotify is set to lay off almost 1,500 people at the company.
Spotify logo. Credit: Jakub Porzycki
In hopes of allowing Spotify to continue being a “sustainable business”, CEO Daniel Ek has announced that 17 percent of the Spotify workforce will be laid off.
In a statement posted today, Ek explained that, for Spotify to achieve its goal of being “the world’s leading audio company and one that will consistently drive profitability and growth into the future,” it will need to cut costs.
“The decision to reduce our team size is a hard but crucial step towards forging a stronger, more efficient Spotify for the future,” he explains further. Ek pinpoints “too many people dedicated to supporting work… rather than contributing to opportunities with real impact” as an unnecessary cost, and ultimately a sign of Spotify losing sight of its core principles and priorities, he adds.
“In Spotify’s early days, our success was hard won,” he writes. “We had limited resources and had to make the most of every asset. Our ingenuity and creativity were what set us apart. As we’ve grown, we’ve moved too far away from this core principle of resourcefulness.”
The mass laying off is Spotify’s third of 2023, having cut out 6 percent of its workforce in January, as well as 200 podcast division roles in June.
While Spotify has raised its plan prices over the Summer, the company hasn’t exactly been turning a profit. The Wall Street Journal notes that the company reported losses of €462 million (approximately $502 million) in the first nine months of 2023 year. And the company has actually never turned over an annual profit, as reports The Washington Post.
Employees affected by Ek’s decision will receive five months of redundancy pay, as well as the company also promising to cover their healthcare over the five month span.
Spotify’s continuing to make headlines around the globe for its 2023 edition of the annual Wrapped feature. Artists, fans and music industry figureheads are criticising the platform for its data collection, (which The Guardian says is “creepy [and] meaningless”) and unsatisfactory royalty payouts. Producer and creator Hainbach recently revealed that the 1 million streams his music accumulated this year will be enough to cover his utilities bills, at around $2,160 of royalty payouts.
Read Daniel Ek’s statement at the Spotify Newsroom.
