Music streaming major Spotify is cutting jobs by around 17 per cent across the company to reduce costs amid an economic slowdown and costlier capital, said its CEO Daniel EK in a blogpost. This is the third round of job cuts at the company and is expected to lay off around 1,500 employees.
The announcement comes after Spotify recently announced its first profitable quarter in two years with an operating profit of 32 million euros.
“To align Spotify with our future goals and ensure we are right-sized for the challenges ahead, I have made the difficult decision to reduce our total headcount by approximately 17 per cent across the company,” CEO Daniel EK said in the blog.
He said he recognised this would impact a number of individuals who have made valuable contributions. “To be blunt, many smart, talented and hard-working people will be departing us.”
Economic growth has slowed dramatically and capital has become more expensive. Spotify is not an exception to these realities, the Spotify CEO said.
“I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance. We debated making smaller reductions throughout 2024 and 2025. Yet, 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. While I am convinced this is the right action for our company, I also understand it will be incredibly painful for our team,” he said.
He said that as part of the process, the impacted employees will receive a calendar invite from HR for a one-on-one conversation. These meetings will take place before the end of the day on Tuesday. He said the following will apply to all of these bandmates:
Severance pay: We will start with a baseline for all employees, with the average employee receiving approximately five months of severance. This will be calculated based on local notice period requirements and employee tenure.
PTO: All accrued and unused vacation will be paid out to any departing employee.
Healthcare: We will continue to cover healthcare for employees during their severance period.
Immigration support: For employees whose immigration status is connected with their employment, HRBPs are working with each impacted individual in concert with our mobility team.
Career Support: All employees will be eligible for outplacement services for two months.
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