Spotify Announces Workforce Reduction in Cost-Cutting Move
In a public memo, Daniel Ek, co-founder, and CEO of Spotify, revealed that the Swedish audio streaming giant will be implementing layoffs affecting approximately 17% of its workforce. This marks the third round of layoffs for Spotify, coupled with recent hikes in its Premium subscription service prices.
Spotify Cutting Down Its Workforce
Based on the latest quarterly report, the layoff will impact around 1,500 employees out of the total 9,241 globally. The decision comes after previous layoffs in January (600 employees) and July (200 from the Podcasts division). Ek cited the need for a more significant reduction due to the gap between financial goals and current operational costs.
The memo highlighted Spotify’s substantial increase in headcount during 2020 and 2021, nearly doubling its workforce. While the company focused on content, marketing, and exploring new verticals, the subsequent years failed to improve efficiency, prompting the recent drastic measures.
Each affected employee will receive severance pay equivalent to about five monthly wages, along with payment for accrued and unused paid time off. Health care coverage will continue during the severance period, and individuals will be eligible for reemployment after two months.
Ek emphasized that the move aims for a “more focused approach” and is not a step back but a “strategic reorientation.” The remaining workforce is encouraged to adopt a “relentlessly resourceful” mindset to address challenges and drive innovation in the company’s future endeavors.
Pokdepinion: It might seem kind of evil or greedy but sometimes, it’s just a necessary move. The mere fact that they’re getting a significant severance package is already excellent, and I hope each individual will find a new job sooner rather than later.
