Spotify plans to cut about 17 percent of its workforce in the company’s third round of layoffs this year, CEO Daniel Ek announced on Monday.
About 1,500 employees will be impacted, based on Spotify’s numbers in its third quarter earnings report. The company previously laid off about 600 workers in January and another 200 members of its podcasting division in June.
“Over the last two years, we’ve put significant emphasis on building Spotify into a truly great and sustainable business – one designed to achieve our goal of being the world’s leading audio company and one that will consistently drive profitability and growth into the future,” Ek said in a note to employees on Monday.
“While we’ve made worthy strides, as I’ve shared many times, we still have work to do,” he added. “Economic growth has slowed dramatically and capital has become more expensive. Spotify is not an exception to these realities.”
Ek acknowledged that the latest layoffs would feel “surprisingly large” to many at Spotify given the company’s recent earnings report. Spotify reported a profit of 65 million euros in the third quarter of 2023, the first time it had posted a profit in a year and a half, according to CNBC.
However, the CEO suggested that there was still a “gap between our financial goal state and our current operational costs” and said he decided “a substantial action to rightsize our costs was the best option.”
Ek said in Monday’s note that impacted employees would receive a calendar invite shortly and would meet with human resources by the end of the day on Tuesday.
“I recognize this will impact a number of individuals who have made valuable contributions. To be blunt, many smart, talented and hard-working people will be departing us,” Ek said.
“For those leaving, we’re a better company because of your dedication and hard work. Thank you for sharing your talents with us,” he added. “I hope you know that your contributions have impacted more than half a billion people and millions of artists, creators, and authors around the world in profound ways.”