Spotify wants to lay off 17 percent of its employees. CEO Daniek Ek points to more expensive capital, despite the company having more listeners and better figures.
Music streamer Spotify had 9,241 employees in September. This would mean the layoffs would amount to approximately 1,571 people losing their jobs. In a statement, Ek thanks them for their work but also conveys that layoffs are necessary to achieve the financial goals.
More users, higher rates
However, Spotify is not doing badly. At the end of October, the company announced that it had 574 million monthly users, compared to 551 million a year earlier. The quarterly profit amounted to 32 million euros, although previous quarters were operationally loss-making.
At the same time, the subscription price went up last year, and the company already cut 200 jobs in the podcast division this year, and six percent of its staff was fired at the beginning of this year.
In a message to employees, Ek explains that capital is much more expensive today. In 2020 and 2021, the capital was much cheaper, so there was a significant expansion in teams, marketing and new activities. Today, the situation is different, and, according to Ek, the company has an excessive cost structure. Current operating costs are too high.
Spotify’s headcount has grown threefold since 2020. At that time, the company employed 3,651 people. By 2022, that rose to 8,359. The most recent figure, from September 2023, speaks of 9,241 employees. With this round of layoffs, Spotify is returning to the number of employees it had two years ago.