Spotify to Lay Off 17% of Global Workforce newsbhunt

Spotify is laying off 17% of its global workforce in order to cut costs, CEO Daniel Ek said on Monday.

According to the Financial Times, Ek made the announcement in an internal memo sent to staff. “I recognize this will impact a number of individuals who have made valuable contributions,” Ek wrote in the memo. “To be blunt, many smart, talented and hard-working people will be departing us.”

Spotify currently employs over 9,000 people globally, meaning the layoffs will impact around 1,500 workers. Though the music streamer has accomplished steady subscriber growth, boasting 220 million paying subscribers, it has still struggled to become profitable.

“Considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives,” Ek continued.

CFO Paul Vogel hinted that more layoffs were to come during an earnings call in July. “Q2 was last quarter where we had headcount higher year over year, and we expect our year over year headcount to be down in Q3 — we’ll see where that goes going forward,” he said. “We’re continuing to be more efficient and feel really good about where we are, so you will see some of that efficiency have even more of an impact in the back half of the year with respect to the op-ex.”

Earlier this year, Spotify cut 6% of its workforce and laid off an additional 200 employees in June. As the company has grown, Ek concluded, it has “moved too far away from this core principle of resourcefulness.”