Spotify is cutting about 17% of jobs, its third round of layoffs this year, as music streaming looks set to become “productive and efficient.”
In a memo to employees on Monday, Spotify founder and CEO Daniel Ek said right-sizing the workforce is critical for the company to meet the “challenges ahead.”
He cited slowing economic growth and rising capital costs among the reasons for the job cuts, saying the company took advantage of low-cost capital in 2020 and 2021 to invest heavily in the business.
“I realize that this will impact a number of individuals who have made valuable contributions. To be frank, many smart, talented, hardworking people will leave us,” he wrote in the memo, which the company later released. published On the blog.
Spotify employs about 10,000 people, meaning Monday’s move will affect more than 1,500 employees. He added that affected employees will be notified later in the day.
The new wave of layoffs comes on the heels of Spotify cutting jobs by nearly 6% in June of this year and a few hundred more employees in January.
“I realize that for many, a reduction of this size would be surprisingly large given the recent positive earnings report and our performance. We have discussed making smaller reductions throughout 2024 and 2025.”
“However, given the gap between our financial goal status and our current operating costs, I have determined that taking substantive action to correct our costs is the best option to achieve our goals.”
Industries globally have seen significant layoffs this year, totaling more than 225,000 employees, due to economic volatility, rising interest rates and evolving consumption patterns. The technology sector, including companies like Amazon, Google, Meta, Twitter and Netflix, is facing notable cutbacks, amplifying economic anxiety among employees.