Spotify chief executive Daniel Ek has said he made the “difficult” decision as economic growth has “slowed dramatically”... despite turning a profit of €65m for the September-November quarter.
ADVERTISEMENTThe popular music-streaming app Spotify has announced it will cut down 17 per cent of its workforce in order to save costs, despite announcing a profit in its latest quarterly earnings.
To put that figure into context, Spotify employs around 9,000 people, meaning that 1,500 jobs will be lost in the current round of layoffs.
The streaming platform previously fired 6 per cent of its staff in January, saying at the time it was doing so to promote “speed”.
Now, chief executive Daniel Ek has said he made the “difficult” decision as economic growth has “slowed dramatically”.
“I recognise this will impact a number of individuals who have made valuable contributions,” Ek wrote. “To be blunt, many smart, talented and hard-working people will be departing us.”
Despite turning a profit of €65m for the September-November quarter (its first quarterly profit for more than a year), as well as currently having 601 million users (up from 345 million at the end of 2020), the 1,500 employee redundancy is surpringly large.
“We debated making smaller reductions throughout 2024 and 2025,” Ek wrote. “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.”
In recent news, Taylor Swift was announced as the platform’s Top Artist of the Year, having reportedly earned over $100 million in royalties from Spotify alone.
However, Spotify has recently made controversial changes to its platform, including a streaming threshold of 1,000 plays to generate royalties.
There are around 100 million songs on the service, and only around 37.5 million meet the new requirements to generate revenue.
