Spotify will lay off about 17% of its total workforce across the company, according to an internal email sent on Monday. The layoffs follow an earlier round of layoffs in January when the company reduced its headcount by roughly 6% of its workforce, citing higher costs.
The company has reported that it had swung into a profit for the third quarter, with the help of price hikes to its streaming services and a period of subscriber growth in all regions. It forecast that over the holiday quarter it would see monthly listeners hit 601 million.
Daniel Ek, the company’s CEO, said in an interview with Reuters at the time that the company was going to be focusing on efficiency, and getting more out of each dollar it spent.
He said on Monday that given the recent positive earnings report and the company’s improved performance, a headcount reduction of this size would feel unusually large.
In an email to employees, Ek said, “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.”
He added that in 2020 and 2021, the company “took advantage of the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing and new verticals.”
“However, we now find ourselves in a very different environment. And despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big.”
