Spotify Will Cut 17% Of Jobs To Improve Profitability
Spotify Technology SA said it reduce headcount by about 17%, at least the third time this year the streaming service has cut jobs.
Impacted employees will be notified on Monday and meet with human resourcesthe end of the day on Tuesday, the music streaming company said in a statement. The cuts will affect about 1,500 people, a spokesperson said.
The streaming audio giant is on pace to add more than 100 million users this year, its biggest year yet. The company also reported a rare profit last quarter.
But Chief Executive Officer Daniel Ek said Spotify is still spending too much. The company has long lost money because of the terms of licensing agreements with music rights holders. It spent billions of dollars on podcasting to diversify its business model but has since scaled back its investment in original audio series.
“We still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact,” Ek said in the statement. “More people need toon delivering for our key stakeholders – creators and consumers.”
The company previously cut about 6% of its workforce in January and another 2% in June.
The company will focus on a lean structure that will allow it to be more strategic about how it reinvests profits in the business, Ek said. He’ll address the cuts on Wednesday in a meeting with employees.
“Economic growth has slowed dramatically and capital has become more expensive,” Ek said. “Spotify is not an exception to these realities.”