Spotify has announced layoffs impacting 17 percent of its employees, its third layoff of 2023. The Company is desperately chasing profitability, with CEO Daniel Ek explaining, “As we’ve grown, we’ve moved too far away from this core principle of resourcefulness.”
The Verge reports that Spotify, the global music streaming giant, has recently announced a substantial reduction in its workforce. The decision, announced by CEO Daniel Ek in a memo to employees, will see 17 percent of the company’s staff laid off. This translates to over 1,500 employees, based on Spotify’s reported total headcount of 9,241 as revealed in their last earnings release.
The layoffs come amid a broader push by the company to streamline operations and reduce costs as it struggles to become profitable. In his memo, Ek cited slowing economic growth and rising costs as the primary reasons for this decision. He emphasized that the company needs to focus on work that contributes directly to its core goals and opportunities with real impact.
Ek stated: “Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact,” Ek wrote. “As we’ve grown, we’ve moved too far away from this core principle of resourcefulness.”
This move marks Spotify’s third major round of layoffs this year, with a six percent cut in January (about 600 employees) and a further reduction in the podcast division in June. Spotify’s workforce had significantly expanded during the pandemic, nearly doubling over the past three years. However, the current economic climate has prompted a shift in strategy. Ek defended the earlier expansion but acknowledged the need for adjustments in response to the changing environment.
Employees affected by the layoffs will receive around five months of severance pay, and their healthcare will continue to be covered during this period. Spotify traditionally prioritized growth over profits, but this layoff reflects a growing pressure from investors for increased profitability. Ek has previously expressed his intention for Spotify to become profitable by 2024. Despite reporting a quarterly profit in its last earnings release, the company has faced losses of approximately €462 million ($502 million) in the first nine months of this year.
Read more at the Verge here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan