Spotify cuts 17% jobs amid rising capital costs, He stated that affected workers will receive notifications later in the day.
As part of its third round of layoffs this year, Spotify is laying off roughly 17% of its workforce in an effort to make the music streaming service “both productive and efficient.”
Daniel Ek, the founder and CEO of Spotify, stated in a memo to staff members on Monday that the firm must appropriately scale its workforce in order to meet the “challenges ahead.”
The corporation took advantage of lower-cost capital in 2020 and 2021 to invest considerably in the business, he said, citing poor economic growth and growing capital expenses as reasons for the job losses.
“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,” in the memo that was later posted on the official site.
With over 10,000 employees, Monday’s change will affect more than 1,500 of them. He stated that affected workers will receive notifications later in the day.
The most recent round of layoffs comes after Spotify eliminated several hundred people in January and roughly 6% of its workforce in June of this year.
“I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance. 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.”
Over 225,000 workers have been laid off internationally this year due to a combination of factors including fluctuating interest rates, changing consumer behavior, and unstable economies. Increased layoffs in the internet industry, which includes companies like Amazon, Google, Meta, Twitter, and Netflix, contribute to employee financial distress.
