In this image from February 11, 2022, small figures can be seen in front of the Spotify logo displayed. Portal/Dado Ruvic/Ilustration/File Photo acquire license rights
STOCKHOLM, Dec 4 (Portal) – Music streaming giant Spotify (SPOT.N) said on Monday it will lay off around 1,500 employees, or 17% of its workforce, to cut costs after cutting 600 of its employees in January had laid off and 200 more in June.
After a series of job cuts earlier this year by tech companies, some have begun reducing their workforces again, with announcements from Amazon on Microsoft-owned LinkedIn.
In a letter to employees, Spotify CEO Daniel Ek said the company hired more people in 2020 and 2021 due to lower capital costs, and that while production has increased, much of that is related to more resources.
In the third quarter, the company reported a profit, helped by price increases on its streaming services and growth in subscribers across all regions, and the company forecast that monthly listeners would reach 601 million in the holiday quarter.
Ek told Portal at the time that the company was still focused on improving efficiencies to get more out of every dollar.
On Monday, he said a reduction of that magnitude would seem large given the company’s recent positive earnings report and performance.
“By most measures we were more productive but less efficient. We have to be both,” Ek said.
“We have discussed making smaller reductions in 2024 and 2025,” Ek said. “However, given the gap between our financial goals and our current operating costs, I concluded that a comprehensive effort to adjust our costs is the best option to achieve our goals.”
(This story has been corrected so the headline reads “third layoff,” not “second.”)
Reporting by Supantha Mukherjee, Writing by Anna Ringstrom, Editing by Essi Lehto, Terje Solsvik and Louise Heavens
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Originally posted 2023-12-04 09:18:14.