Spotify, a major music streaming company, announced on 4 December that it will reduce expenses by laying off 1,500 workers, or 17% of its workforce. This comes after the company let go of 600 people in January and 200 more in June.
Following a wave of layoffs at the beginning of the year, some tech businesses have reduced staff again. Notable examples include Amazon and Microsoft-owned LinkedIn.
Spotify CEO Daniel Ek stated in a letter to staff that the company employed more people in 2020 and 2021 due to the lower cost of capital. Even though output grew, a large portion of that rise was attributable to having more resources.
The firm turned a profit in the third quarter thanks to pricing increases for its streaming services and increased subscribers across all regions. The company predicted that 601 million people would listen to its content each month by the end of the holiday quarter.
At the time, Ek told Reuters, the corporation was still improving efficiencies to maximize every dollar.
He stated on Monday that a cut this big will seem significant in light of the company’s performance and the most recent favorable earnings report.
“By most metrics, we were more productive but less efficient. We must be both,” Ek remarked.
“We debated making smaller reductions throughout 2024 and 2025,” Ek said.
“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.
