Music streaming company Spotify has revealed plans to lay off 1,500 employees, which accounts for about 17% of its workforce.
Founder and CEO Daniel Elk mentioned that the company took advantage of the economic situation in 2020-21 to hire more employees. However, Spotify has not performed well enough to justify these hires.
“I recognize this will impact a number of individuals who have made valuable contributions,” he wrote in a company blog. “To be blunt, many smart, talented and hard-working people will be departing us.”
The impacted workers were being notified on Monday. The December layoffs are the latest in a series of job cuts at Spotify this year. The company cut about 200 jobs in January and then another 600 in June. After this week’s firings, Spotify will retain around 7,300 employees.
Despite exceeding predictions for user growth in the past quarter and expectations for surpassing this year’s fourth-quarter expectations, Mr. Elk stated that the layoffs were inevitable.
“I realize that for many, a reduction of this size will feel surprisingly large,” he wrote, “given the recent positive earnings report and out-performance. We debated making smaller reductions throughout 2024 and 2025.”
The economic environment has prompted several tech companies around the world to struggle, and layoffs have become an unfortunate reality. After Elon Musk shocked the tech industry by firing the majority of Twitter’s staff last year, other companies followed suit.
Driven by a tumultuous economic climate, popular tech companies such as Meta, Amazon, and Google have begun scaling back future projects and cutting staff, collectively firing thousands of workers this year.
