Spotify lays off 17% of its employees, sending shockwaves through the industry

Auteur: All Buzznews

2023-12-04 10:50:15

The Swedish company, which employs around 9,000 people, plans to let go of around 1,500 employees.

Spotify lays off 17% of its employees!

Credit: Getty Images

Spotify, the streaming music giant, is taking radical measures to cope with a difficult economic climate by reducing its workforce by around 17%.

Spotify lays off 17% of its employees!

Credit: Getty Images

In his message to the company, CEO Daniel Ek explains the decision as a response to the dramatic slowdown in economic growth and the consequent need to reduce operating costs.

Spotify lays off 17% of its employees!

Credit: Getty Images

This follows two smaller rounds of layoffs last year, with over 600 employees let go in January and another 200 in June.

Spotify lays off 17% of its employees!

Credit: Getty Images

Despite posting a third-quarter profit for the first time in over a year, Spotify has succumbed to the pressures experienced by many in the tech sector, announcing a significant series of redundancies. The Swedish company, which employs around 9,000 people, plans to shed around 1,500 employees.

Spotify lays off 17% of its employees!

Credit: Getty Images

In the face of positive earnings, with a profit of 65 million euros for the period ending September and a subscriber base that grew from 345 million at the end of 2020 to 601 million, the layoffs may seem counter-intuitive. However, Ek stressed the need for change to be both "productive and efficient", pointing out that despite growth, the company had become less efficient and had strayed from its core principles of innovation and agility.

Spotify lays off 17% of its employees!

Credit: Getty Images

Employees affected by the redundancies will be informed this week and will receive an average of five months' severance pay, paid vacation and medical cover during the redundancy period. Ek acknowledged the impact of the redundancies on talented staff and indicated that immigration assistance would be extended to those whose status is linked to their employment at Spotify.