Spotify to Lay Off Around 17% of its Work Force

In another blow to the working community, the music streaming giant Spotify announced that it will cut its workforce by around 17%. It is being done to cut costs amid “dramatically” slower economic growth. In October,  Spotify posted a rare quarterly operating profit of 32 million euros, as compared to a loss of 228 million for the same period in 2022.

In this regard, Chief Executive Daniel Ek wrote in a letter to employees, saying,

“I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance. In 2020 and 2021, the company took advantage of the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing, and new verticals. However, we now find ourselves in a very different environment. And despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big.”

Spotify has invested immensely since its launch to boost growth with entries into new markets. In later years, the company invested in exclusive content such as podcasts. As per a source, the company has invested more than one billion dollars into podcasts alone.

In 2017, the total staff count was nearly 3,000, which went up to around 9,800 by the end of 2022. Despite its success in the online music industry, Spotify has yet to record a full-year net profit and occasionally reports quarterly profits.

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