Spotify is shedding 17 % of its workers in an try to chop prices, its CEO Daniel Ek announced to staff today. Based mostly on its whole headcount of 9,241 revealed throughout its final earnings launch, the cuts are anticipated to impression over 1,500 folks.
In a memo despatched to workers, Ek stated slowing financial progress and rising prices had been responsible for the cuts, which he stated would make Spotify a leaner firm. “At this time, we nonetheless have too many individuals devoted to supporting work and even doing work across the work slightly than contributing to alternatives with actual impression,” Ek wrote. “As we’ve grown, we’ve moved too distant from this core precept of resourcefulness,” he later added.
“As we’ve grown, we’ve moved too distant from this core precept of resourcefulness”
These layoffs have come after Spotify’s headcount elevated considerably through the pandemic, with its headcount almost doubling prior to now three years, The Wall Street Journal notes. In his memo, Ek defended his resolution to develop the group all through that interval, however stated that “we now discover ourselves in a really completely different surroundings.”
Staff impacted by Spotify’s newest layoffs will obtain round 5 months of severance pay based on Ek’s memo, throughout which period the corporate will proceed to cowl their healthcare.
Spotify has typically prioritized progress over quarterly income all through its historical past, however the WSJ notes that traders have been more and more pushing for profitability over the previous 12 months. Ek stated at an investor day final 12 months that he intends for Spotify to be worthwhile by 2024. Though the corporate posted a quarterly profit in its last earnings release, the WSJ notes that it reported losses of €462 million (round $502 million) within the first 9 months of this 12 months.