Spotify cuts 17% of its global workforce in the latest round of cuts
Spotify on Monday said it is laying off 17% of its global workforce, marking the third round of cuts this year for the Swedish audio giant as it tries to reduce costs amid an economic slowdown.
The layoffs will affect about 1,500 people at many of the company’s locations, including in Los Angeles, according to a person familiar with the situation who declined to be named because they were not authorized to speak publicly about the matter.
“Economic growth has slowed dramatically and capital has become more expensive,†said Daniel Ek, Spotify’s chief executive, in a blog post. “Spotify is not an exception to these realities.â€
Ek said the company had considered making smaller reductions in 2024 and 2025 instead, but “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.â€
“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. “More people need to be focused on delivering for our key stakeholders — creators and consumers.â€
Spotify is reducing its staff by 200 people, amid broader changes to the streaming giant’s podcasting division.
Spotify in recent years took advantage of low interest rates to invest in expanding its team, marketing, enhancing its content and new verticals, Ek said. That spurred the platform’s growth in the last year. But now, it’s a different environment and the company needs to streamline, accord to Ek.
“[D]espite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big,†he wrote.
In January, Spotify laid off 6% of its staff, roughly 600 people. In June, the audio company reduced its staff by an additional 200 people.
Spotify went on a hiring spree a few years ago when it began heavily investing in podcasting, buying companies including Parcast, Gimlet and the Ringer to build a production pipeline for its streaming service to expand into audio storytelling. In 2021, Spotify launched a new office in L.A., which could accommodate as many as 600 employees.
As part of its podcast growth strategy, Spotify inked deals with prominent newsmakers including the Obamas’ production company Higher Ground and popular podcasters like Joe Rogan.
But as some of those deals expired, Spotify did not renew them — including the one with Higher Ground. In October 2022, Spotify laid off nearly 40 people from its podcasting staff and scrapped 11 podcasts. The company said it would continue to invest in original programming.
Taylor Swift’s massive year continues as 2023’s most streamed artist on the Swedish audio platform. The rankings are part of the company’s annual Spotify Wrapped marketing blitz.
Ek said the layoffs announced Monday are “a hard but crucial step towards forging a stronger, more efficient Spotify for the future.â€
“This is not a step back; it’s a strategic reorientation,†Ek wrote. “We’re still committed to investing and making bold bets, but now, with a more focused approach, ensuring Spotify’s continued profitability and ability to innovate. Lean doesn’t mean small ambitions; it means smarter, more impactful paths to achieve them.â€
Spotify stock rose about 9% on Monday morning to $196.55 a share.
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