Spotify Announces Layoffs In Pursuit Of Profitability

In a bold move aimed at enhancing profitability, Spotify CEO Daniel Ek announced layoffs of 17%, affecting up to 1,500 employees globally.

In a bold move aimed at enhancing profitability, Spotify CEO Daniel Ek announced substantial layoffs of 17%, affecting up to 1,500 employees globally. This marks the company’s third and most extensive round of workforce reduction in 2023, following similar measures in January and June, according to Rolling Stone.

Ek conveyed the news to Spotify’s global staff in an internal memo, which was later made public on the company’s newsroom landing page. “I recognize this will impact a number of individuals who have made valuable contributions. To be blunt, many smart, talented, and hard-working people will be departing us,” Ek wrote in the memo.

Spotify, currently employing around 9,000 people worldwide, experienced a positive third-quarter performance, with an 11% boost in total revenue, reaching $3.6 billion, according to Financial Times. The company reported its first quarterly profit since 2021, with $34 million in operating income. Despite these positive indicators, the Stockholm-based music streaming giant has faced financial challenges, reporting losses of €462 million (over $500 million) in the first nine months of the year.

“We debated making smaller reductions throughout 2024 and 2025,” Ek stated. “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.”

Affected Spotify employees will, on average, receive a severance package equivalent to approximately five months of pay and will continue to receive health care benefits during this period after their layoff. The company’s CEO emphasized the need for the remaining workforce to focus on productivity and efficiency.

“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 asserted. “More people need to be focused on delivering for our key stakeholders — creators and consumers. In two words, we have to become relentlessly resourceful.”

While the move is seen as a strategic step towards achieving financial goals, it comes amidst a backdrop of positive growth and increased subscriber numbers for the streaming service. The reduction signals Spotify’s commitment to aligning its operational costs with its financial objectives.