In a move aimed at curbing costs amid a stark economic downturn, Spotify, the Swedish music-streaming titan, has declared a reduction of 1,500 jobs, accounting for 17% of its global workforce.
Daniel Ek, the company’s Chief Executive, described the decision as “difficult” but deemed it necessary due to the sharp deceleration in economic growth. With Spotify employing approximately 9,000 individuals, Ek emphasized the imperative need for “substantial action to rightsize our costs” to align with the company’s strategic objectives.
Expressing awareness of the profound impact on the team, Ek acknowledged the departure of numerous talented and hard-working individuals. “To be blunt, many smart, talented and hard-working people will be departing us,” he remarked, recognizing the contributions made by those affected.
This cut surpasses previous staff reductions carried out earlier in the year by the company. Spotify had reported a profit of €65m (£55.7m) in its recent quarterly results, a significant milestone after over a year without a quarterly profit. The surge in profits was attributed to increased subscriber numbers and price hikes.
Despite these positive financial outcomes, Ek noted that the magnitude of the job cuts might be surprising, considering the recent encouraging results. Explaining the decision, he outlined that while contemplating smaller reductions over the coming years, Spotify concluded that more drastic measures were imperative to fortify the company’s financial standing.
Since its inception, Spotify has invested heavily in business expansion and securing exclusive content, notably high-profile podcasts featuring personalities like Michelle and Barack Obama, as well as the Duke and Duchess of Sussex. However, some endeavors, including the podcast deal with Harry and Meghan, reported at $25m (£19.7m), saw limited output with just 12 episodes delivered over two and a half years before concluding in June.
Reflecting on the podcast content, Ek remarked to the BBC in September that while some initiatives yielded favorable outcomes, others did not meet anticipated benchmarks.