It was announced that the popular streaming music service Spotify will cut around 17% of its employees – more than 15,000 people. The new round of cuts will be the company’s third this year. This is due to rising capital costs.
In a message to employees, Daniel Ek, founder and CEO of Spotify, said having the right headcount is critical to the company “Coming challenges”. He linked the need for workforce reductions to slower economic growth and increased capital costs. “I understand that this will impact some people who have made valuable contributions. Frankly, a lot of smart, talented, hard-working people will be leaving the company.”says the head of Spotify, which was published on the company’s blog.
Spotify currently employs around 10,000 people. This means that the new phase of layoffs will affect more than 1.5 thousand people. Employees who need to leave the company will reportedly be notified in a timely manner. Recall that Spotify cut about 6% of its workforce in June this year, and several hundred more employees left the company in January.
“I understand that the current decline may seem surprisingly large to many given the recent positive earnings report and our financial results. We discussed the possibility of smaller cuts in 2024 and 2025. However, given the gap between our target financial position and current operating costs, I have concluded that significant cost adjustment measures are the best option to achieve our objectives.”, —Ek wrote in his address.