Spotify, the music streaming giant, started 2023 with layoffs and is now ending the year with another round of job cuts. Today, Spotify CEO Daniel Ek announced that an additional 17% of staff, approximately 1,500 employees, would be laid off this week.
In January 2023, Spotify laid off about 600 people, or 6% of its workforce. Then, in June 2023, an additional 2% of its workforce, or approximately 200 people, were let go. The latest round of layoffs announced today far exceeds the previous two combined.
In his memo to employees, Ek stated that economic growth has slowed significantly for companies, while capital has become more expensive. Due to this, he made the difficult decision to reduce the total headcount by 17% across the company.
Ek also attributed the layoffs to significant hiring in 2020 and 2021, noting that the increase in headcount during the early pandemic years did not make the company more efficient. He emphasized the need for both productivity and efficiency for the company to succeed.
The affected employees will reportedly meet with Spotify HR today, and the meetings will conclude by the end of the day on Tuesday.
Ek concluded his memo by stating that a leaner Spotify will allow the company to invest its profits more strategically back into the business, leading to greater opportunities for success.
