Challenging Times: Spotify Announces 17% Workforce Reduction
Spotify, the music streaming giant, announced on Monday its decision to reduce its workforce by approximately 17%, amounting to about 1,500 employees. This move is aimed at cutting costs in response to a significant slowdown in economic growth. Despite reporting a rare quarterly net profit of 65 million euros in October, marking a notable shift from a loss of 166 million euros for the same period a year earlier, Spotify’s CEO Daniel Ek expressed the need for a leaner structure due to the challenging economic environment.
The company has experienced substantial growth in active users, reaching 574 million in the third quarter, but economic pressures have prompted the need for strategic cost reductions. This marks Spotify’s third round of layoffs in 2023, following previous cuts in January and June. The decision reflects a broader trend in the tech industry, where various companies have announced layoffs amid economic uncertainties.
