Spotify To Cut About 17% Staff

Spotify Technology SA, a provider of digital music, podcast, and video service, said it is eliminating total headcount by around 17% across the company amid its efforts to cut costs to become “productive and efficient.” The decision will affect around 1,500 employees, reports said.

In pre-market activity on the NYSE, Spotify shares were gaining more than 2 percent.

In a note to employees, Spotify founder and Chief Executive Officer Daniel Ek said the decision to reduce its size was taken with a view to forge a stronger, more efficient Spotify for the future to meet the challenges ahead.

He said, “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. 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.”

The CEO noted Spotify was expecting to consistently drive profitability and growth into the future, but economic growth has slowed dramatically and capital has become more expensive. The company said its cost structure is still too big despite efforts to reduce costs this past year putting it in a very different environment.

“When we look back on 2022 and 2023, it has truly been impressive what we have accomplished….By most metrics, we were more productive but less efficient. We need to be both. While we have done some work to mitigate this challenge and become more efficient in 2023, we still have a ways to go before we are both productive and efficient,” he added.

Spotify in early June had laid off 200 employees in its podcasting unit, or about 2% of its workforce.

Source: Read Full Article