Spotify announces further reduction in its workforce, 1,500 employees affected

“I am aware that for many, a reduction of this magnitude may seem surprising given the recent positive earnings report and our performance,” wrote chief executive Daniel Ek.

Spotify announced on Monday, December 4, a reduction in its workforce by“around 17%”, or some 1,500 people. The global audio platform giant intends to reduce its costs, in a context of slowdown “spectacular” of economic growth. This is the third wave of workforce reductions, since the Swedish group had decided to cut 600 jobs in January and 200 in June in its podcasts division.

“I am aware that for many, a reduction of this magnitude may seem surprising given the recent positive earnings report and our performance”, wrote general manager Daniel Ek, in a letter to employees consulted by AFP. These layoffs should make it possible to“align Spotify with our future goals and ensure we are well-sized for the challenges ahead”he explained in this letter.

“A very different environment”

According to Daniel Ek, in 2020 and 2021, the company “took advantage of the opportunity presented by lower cost capital and invested significantly in team expansion, content enhancement, marketing and new verticals.” “However, we find ourselves in a very different environment today. And despite our efforts to reduce costs last year, our cost structure to achieve our goals is still too large”he added.

In 2017, the company had around 3,000 employees, a number that has more than tripled to around 9,800 people by the end of 2022. Since its inception, the platform has never posted a net profit across all of year and only occasionally makes quarterly profits, despite its success in the online music market.