What you need to know
- Spotify founder and CEO Daniel Ek announced today that the company is cutting 1,500 jobs in another round of layoffs.
- Ek justified the layoffs as a step in the right direction in establishing a leaner company.
- This comes on the heels of the music streaming service laying off 600 employees earlier this year and another 200 after consolidating its podcasting team.
Spotify is apparently not done laying off its employees. On the heels of cutting about 600 of its workers, the music-streaming giant announced that it is once again reducing its headcount by 17% this time.
Daniel Ek, Spotify’s founder and CEO, wrote about the layoffs today in a memo sent to staff, where he attributed the job cuts to rising costs and a slowing economy. Ek justified the latest round of layoffs as the right step towards making the company leaner and balancing productivity and efficiency.
“Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact,” Ek wrote. “As we’ve grown, we’ve moved too far away from this core principle of resourcefulness.”
Based on the company’s Q3 earnings report, Spotify maintained a headcount of 9,241 employees, which means that these latest job cuts are expected to impact more than 1,500 workers.
These impacted employees will now receive around five months of severance pay, during which the company will continue to cover their healthcare expenses, according to the memo from Ek.
This latest round of job cuts follows the 600-employee layoff earlier this year, as well as an additional 200-worker reduction after consolidating its podcast team.
Ek further highlighted a “gap between our financial goal state and our current operational costs.” The billionaire CEO added that Spotify’s bloated headcount as a result of mass pandemic hiring meant a misappropriation of company resources and the onset of redundant work, which also contributed to the recent layoffs.
While the layoffs are more of the same bitter news, the company emphasizes that it is “still committed to investing and making bold bets, but now, with a more focused approach, ensuring Spotify’s continued profitability and ability to innovate.” This renewed focus on innovation is not surprising, considering the company entered the audiobook space last year.
The company’s announcement today follows a barrage of significant layoffs from other major tech brands this year, including Amazon (which cut 18,000 jobs in its largest layoff in history), Meta (which laid off 5,000 employees), and Google (which reduced its headcount by “hundreds”).
