The huge music streaming giant Spotify revealed on Monday that it will lay off roughly 1,500 employees, or 17% of its workforce, in order to save costs. This comes after the company fired 600 people in January and 200 more in June.Some tech corporations have started cutting back on staff again after a round of layoffs at the beginning of the year; announcements have come from Microsoft-owned LinkedIn to Amazon.
While its productivity has increased, a large portion of that growth may be attributed to having more resources. The company hired more people in 2020 and 2021 as a result of the lower cost of capital, according to a letter from Spotify CEO Daniel Ek to staff members.
The firm turned a profit in the third quarter thanks to pricing increases for its streaming services and an increase in subscribers across all geographies. It projected that by the holiday season, it would have 601 million monthly listeners.
To maximise every dollar, Ek told the news agency at the time that the corporation was still concentrating on efficiency.In light of the company's recent success and the favourable earnings report, he stated on Monday that a cut of this magnitude will seem significant.
Our productivity was higher, but our efficiency was lower by most measures. According to Ek, we must be both. In 2024 and 2025, we discussed implementing modest cuts, according to Ek. "However, I concluded that the best way to achieve our goals was to take a significant step to rightsize our costs in light of the difference between our current operational costs and our financial goal state."
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