Spotify is set to lay off 17% of its workforce
On December 4, 2023, Spotify announced its decision to trim approximately 17% of its workforce as part of a cost-cutting measure in response to a notably sluggish economic growth.
Despite the company's positive third-quarter performance, including a rare operating profit of 32 million euros and a 26% increase in active users, CEO Daniel Ek acknowledged the substantial nature of this reduction in a letter to employees. Ek explained that the move comes after substantial investments in team expansion, content enhancement, marketing, and new verticals during 2020 and 2021, taking advantage of lower-cost capital.
"Nevertheless, we currently operate within a significantly altered environment. Despite our year-long endeavors to cut expenses, our cost structure remains too substantial for the desired scale we aim to achieve."
Since its inception, Spotify has made substantial investments to drive growth, venturing into new markets and, in subsequent years, focusing on exclusive content like podcasts.
The company has poured more than one billion dollars into podcast investments alone.
In 2017, the company employed approximately 3,000 staff members, a number that surged to around 9,800 by the close of 2022, more than tripling its workforce.
Despite its success in the online music market, the company has yet to record a full-year net profit and only sporadically achieved quarterly profits.
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