Music streaming giant Spotify said Monday it will reduce the number of its employees by around 17% in a bid to cut costs amid “dramatically” slower economic growth.
Spotify in October posted a rare quarterly operating profit of 32 million euros, compared to a loss of 228 million for the same period a year earlier, on the back of 26% growth in active users for the third quarter.
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Chief Executive Daniel Ek, in a letter to employees, says he realises that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and the company’s performance.
He said 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, but the cost structure for where the company needs to be is still too big.
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