Spotify to reduce 17 per cent of workforce in cost-cutting exercise
Streaming giant Spotify has revealed plans to reduce its workforce by 17% as part of cost-saving measures.
CEO Daniel Ek described the decision as “difficult”, citing a significant slowdown in economic growth. With approximately 9,000 employees, Spotify anticipates cutting around 1,500 jobs in this current round of layoffs.
“I recognise this will impact a number of individuals who have made valuable contributions,” Ek wrote. “To be blunt, many smart, talented and hard-working people will be departing us,” adding that the cuts would be “incredibly painful for our team.”
Ek also acknowledged the substantial job cuts, a surprise for many considering Spotify’s recent announcement of the company’s profitability. The company recently recorded a profit of around £55.7 million for the third quarter of 2023, marking its first quarterly profit in over a year.
“We debated making smaller reductions throughout 2024 and 2025,” Ek wrote. “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.”
The company stated its commitment to providing five months of severance pay, holiday compensation, and healthcare coverage during the severance period. Additionally, Spotify will extend immigration assistance and career support to affected employees.
This follows a series of new, controversial changes made to the platform, which attracted backlash from high-profile musicians as well as general users. The platform also recently declared its decision to discontinue its services in Uruguay, citing the country’s new copyright law mandating higher pay for artists.
A spokesperson for Spotify said: “Changes that could force Spotify to pay twice for the same music would make our business of connecting artists and fans unsustainable, and regrettably leaves us no choice but to stop being available in Uruguay.”
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