The world’s leading audio platform company, Spotify, announced this Monday a reduction of “around 17%” of workers, to reduce costs in a context of “dramatic” slowdown in economic growth.
17% corresponds to 1,500 workers, who will be laid off.
“To align Spotify with our future goals and ensure we are right-sized for future challenges, I have made the difficult decision to reduce our total headcount companywide by approximately 17%,” CEO Daniel Ek wrote in a letter to the group’s employees. , consulted by France Presse.
In October, the Swedish music platform announced its return to operating profit in the third quarter of this year, after several negative quarters, recording 32 million euros.
“I am aware that for many a reduction of this magnitude may come as a surprise given the recent positive earnings report and our performance,” CEO Daniel Ek wrote in the same document.
According to Ek, in 2020 and 2021 the company “took advantage of the opportunity offered by a lower cost of capital and invested significantly in expanding the team, improving content, marketing and new verticals.”
“However, we now face a very different environment. Despite our efforts to reduce costs last year, our cost structure to achieve our objectives is still too high,” he added.
In 2017, the company had around three thousand employees, a figure that tripled to 9,800 by the end of 2022.
Since its inception, the platform has never posted a full-year net profit and only occasionally turns a quarterly profit, despite its success in the online music market.
*News updated at 09:00
Source: TSF
