Spotify Set To Release 17% Of Its Workforce

Ebuka NwachukwuDecember 4, 2023

Spotify, the powerhouse music streaming company, has decided to terminate 17% of its staff as part of its cost-cutting measures in response to sluggish economic growth. The company announced this Monday, clearly stating the need to reduce expenses. Despite the challenging economic conditions, Spotify reported an impressive quarterly operational profit of 32 million euros in October, thanks to a massive 26% increase in active users for the third quarter. In a letter to the staff, Daniel Ek, the CEO, emphasized that the company had made substantial investments in expanding its team, enhancing its content and marketing, and exploring new avenues in 2020 and 2021, taking advantage of lower-cost capital.

Contained in the letter, a portion read,

“I realise that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance,”

“However, we now find ourselves in a very different environment. And despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big.”

Since its inception, Spotify has made significant investments to support development through market expansions and, in later years, the addition of exclusive content like podcasts. It has made more than $1 billion in podcast investments alone. The company employed about 3,000 people in 2017. By the end of 2022, that number had more than tripled to over 9,800. Despite its popularity in the online music market, the business has only sporadically reported quarterly earnings and never reported a full-year net profit.

https://newsroom.spotify.com/2023-12-04/an-update-on-december-2023-organizational-changes/