Spotify Announces to Lay off 1500 Employees
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Jakarta – The music streaming service provider Spotify has just announced that it will be laying off 1,500 employees or about 17% of its total employees.
Founder and CEO of Spotify, Daniel Elk said it was critical that the company rightsize its financial situation after hiring too many people in 2020 and 2021, when capital was cheaper.
"The Spotify of tomorrow must be defined by being relentlessly resourceful in the ways we operate, innovate, and tackle problems," Ek wrote in a memo to employees.
Spotify.
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"This kind of resourcefulness transcends the basic definition - it's about preparing for our next phase, where being lean is not just an option but a necessity," Ek continued.
The workers affected by the layoffs were notified on Monday earlier this week.
The December layoffs are the latest in a series of layoffs at Spotify this year.
Earlier, Spotify also kicked off 2023 by cutting around 200 workers in January and then another 600 workers in June.
After this week's layoffs, Spotify will 'only' retain around 7,300 employees.
These layoffs may come as a surprise to those who have been watching Spotify's growth throughout this year.
Spotify managed to exceed user growth predictions in the last quarter and is expected to exceed fourth quarter expectations this year. However, Elk said that layoffs are inevitable.
Since 2019, Spotify has spent close to a billion dollars buying up podcasting studios, signing exclusive deals with celebrity hosts and, most recently, investing in generative AI for ad creation.
But all this investment has come with high-profile headaches - and still failed to turn a profit. The company's layoffs in June were specifically focused on downsizing its podcast division.
Departing employees will be offered approximately five months of severance pay plus healthcare coverage, vacation pay, immigration support and two months' worth of career-search assistance, according to Ek's statement.
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