CEO Daniel Ek announced more than a thousand layoffs, providing the necessary motivation to address the company’s finances.
Despite Daniel Ek’s positive statement 32 million eurosThe CEO himself also stated that the company is currently facing a phase of slowing economic growth and rising costs of capital.
This situation made it necessary for the company to take measures to reduce operating costs.
Spotify has planned a staff cut that will affect approximately 1,500 employees.
This reduction represents 17% of the company’s 9,000 global employees, 4,300 of whom are based in the United States.
Daniel Ek explained that this decision was taken in order to address the current challenges arising from the economic and financial context in a timely and meaningful way.
Directives from above
In an official communication, Daniel EK explained that, after examining possible smaller reductions in 2024 and 2025, the discrepancy between financial targets and current operating costs necessitated a significant reduction in expenses as the optimal solution to achieve the previously set targets. .
Ek also outlined the following in the 1,000-word letter sent to staff: Spotify’s future visionIt underlines the importance of the company constantly maintaining an ingenious approach to operational processes, innovation and managing challenges.
He also underlined that dynamism is not a simple option, but an indispensable condition.
Similar to other tech companies, Spotify has experienced growth during the pandemic; Its headcount has nearly doubled in the last three years, outpacing Spotify. 8,000 workers through hiring and acquisitions.
Ek assured that severance pay, payment for unused leaves and health services would be provided during the transition period.
Despite positive results It was determined that the personnel reduction decision taken in the third quarter was an important move to create a more solid and efficient organization for the future.
This arrangement is designed to allow Spotify to reinvest revenues more strategically within its scope of operations.
Spotify reported losses despite the recent agreements with Google. 462 million euros In the first nine months of the year, it has been carrying out a delicate operation to balance the need to achieve continued profitability with investments in growing sectors such as the developing advertising industry.
Special attention was given to its development. audiobook platformIt recently became available for subscribers in the United States.
Outlining future expectations, Ek predicted that 2024 will represent an important chapter for Spotify, helping to further consolidate the platform and leading it to more tangible results.
At the beginning of the year, the company announced its decision to lay off approximately 600 employees, equivalent to 6% of its total staff.
Then, in June, additional plans were announced to cut a further 200 positions, or 2% of the workforce.
These cuts also led to significant changes at the executive level; Former Chief Content Officer Dawn Ostroff, who was a key player in Spotify’s expansion into podcasting, has left the company.
The restructuring saw the transfer of responsibilities to Gustav Söderström and Alex Norström, both co-presidents.