Spotify has announced substantial layoffs not long after a largely positive 2023 Q3 earnings report.
Any positive impacts of Spotify‘s upcoming policy changes are likely to be overshadowed by the company’s latest announcement. The world’s leading music streaming platform has shared that it must cut approximately 17% of its staff.
In a Monday, December 4 memo seen by Music Business Worldwide, Spotify CEO Daniel Ek attributed the decision to the fact that “economic growth has slowed dramatically” and that “capital has become more expensive.” He wrote, “To align Spotify with our future goals and ensure we are right-sized for the challenges ahead, I have made the difficult decision to reduce our total headcount by approximately 17% across the company.“
“I recognize this will impact a number of individuals who have made valuable contributions,” the memo continued. “To be blunt, many smart, talented and hard-working people will be departing us.”
According to Spotify’s 2023 Q3 earnings report, the company currently sits at 9,241 employees. That means that somewhere around 1,571 staff members will depart the company as a result of the layoffs.
This isn’t the first time in recent memory that Spotify has cut staff. 500 employees were laid off in January, with an additional 200 let go in June. The company is also now on a worldwide hiring freeze.
The announcement comes a month after Spotify’s overwhelmingly positive Q3 earnings report, which saw the company’s revenue grow 16% year over year, and 3% over the Q2. “I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance,” Ek wrote. “We debated making smaller reductions throughout 2024 and 2025. 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. While I am convinced this is the right action for our company, I also understand it will be incredibly painful for our team.“
Spotify aims to inform each affected employee of their termination by the end of Tuesday, December 5.
