[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]Spotify has joined the ranks of tech companies downsizing to control costs once again. In a public memo, Daniel Ek, the co-founder and CEO of the Swedish audio streaming service, announced plans to reduce the workforce by approximately 17%, amounting to around 1,500 employees out of a global staff of 9,241, as revealed in the latest quarterly report.
This marks Spotify’s third round of layoffs, with 600 employees let go in January and an additional 200 from the podcast division in July. These measures were accompanied by increases in the pricing of the premium subscription service.
Ek mentioned the possibility of gradual staff reductions in 2024 and 2025.
Previously: Zoom to lay off 1300 employees amid global uncertainty.
However, the disparity between financial targets and operational expenses necessitated immediate action. The memo outlined that Spotify significantly expanded its workforce in 2020 and 2021, nearly doubling the employee count, as the company focused on content expansion, marketing, and exploring new business areas.
Despite increased productivity in 2022 and 2023, desired efficiency levels were not attained, prompting Ek and Spotify to take more drastic measures. Departing employees will receive a severance package covering approximately five months’ wages, payment for accrued and unused paid time off (PTO), ongoing healthcare benefits during the severance period, and the opportunity to seek new employment two months after departure.
Ek emphasized that these adjustments aim to guide Spotify towards a more focused strategy, viewing the staff reduction not as a setback but as a strategic shift. The remaining employees are expected to showcase extraordinary ingenuity and adaptability in the company’s upcoming operational, problem-solving, and innovative pursuits.[/vc_column_text][/vc_column][/vc_row]
