Spotify, a music streaming company, is cutting off 17% of its staff

CEO Daniel Ek claims that “economic growth has slowed dramatically.”

Spotify, a music streaming company, revealed on Monday that it is letting go of 1,500 workers, or 17% of its workforce.

CEO Daniel Ek stated in a statement, “Economic growth has slowed dramatically and capital has become more expensive.” “I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance.”

According to its most recent financial results statement, Spotify’s revenue increased to about €3.36 billion ($3.64 billion) in the third quarter of 2023, up 10.5% from roughly €3.04 billion in the same period the previous year.

During that time, net income attributable to owners was €65 million, a significant improvement over the €166 million loss sustained in the third quarter of the previous year.

“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,” stated Ek.

In January, Spotify made the decision to cut 600 people, or 6% of the workforce. In June, the company made another 2% cut, or about 200 employees.

Many technological organizations have started laying off employees as a result of reduced revenue and declining ad sales.

Thousands of employees have been let go by Uber, Reddit, Disney, 3M, Amazon, Yahoo, Affirm, Zoom, Dell, IBM, Microsoft, Salesforce, PayPal, and Alphabet, the parent company of Google, since the end of the previous quarter.