On Monday, December 4th, CEO of Spotify Daniel Ekpotify announced that his company is eliminating 17% of its global workforce, marking its third round of layoffs in 2023. According to Ek, the focus is not only on cost reduction to achieve profitability but a more general “strategic reorientation.” Although the post did not specify the exact number of job cuts, a spokesperson confirmed it to be around 1,500 employees. The company, which had previously utilized affordable financing for expansion, faced challenges as central banks raised interest rates, impacting economic growth. Despite efforts to reduce costs in the past year, Spotify’s current cost structure is deemed excessive, prompting the need for a “leaner structure” to ensure sustained profitability, according to Ek. The Stockholm-based company reported a net loss of 462 million euros (approximately $500 million) for the nine months leading up to September.
This move follows previous layoffs in January (6% of total staff) and June (2%, primarily in the podcast division). The decision aligns with a broader trend as major tech companies like Amazon, Google, Microsoft, X, Meta, and IBM announce substantial job cuts in 2023.
