Audio streaming company Spotify has announced that it will soon be letting go of 17% of its global workforce.
CEO Daniel Ek wrote in a blog post: To align Spotify with our future goals and ensure we are right-sized for the challenges ahead, I have made the difficult decision to reduce our total headcount by approximately 17% across the company.”
“I recognize this will impact a number of individuals who have made valuable contributions,” he continued. To be blunt, many smart, talented and hard-working people will be departing us.”
Spotify currently employees over 9,000 people worldwide. Thus, these new layoffs will eliminate around 1,500 workers. This number is exponentially higher than their two former round of job cuts in January and June, resulting in the layoff of 600 and 200 employees respectively.
According to Ek’s statement, impacted employees will be given a severance package, PTO, immigration support and career support, as well as healthcare coverage during their transition period.
Despite its dominance in the global music streaming industry, and its steady subscriber growth with over 220 million paying subscribers, Spotify has struggled to become profitable by encountering hurtles as the global economy experienced a slowdown. This layoff is linked to that. As Ek wrote: “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.”
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