Spotify said it will reduce headcount by about 17 per cent, at least the third time this year the streaming service has cut jobs.
Impacted employees will be notified on Monday and meet human resources by the end of the day on Tuesday, the music streaming company said. The cuts will affect about 1,500 people, a representative 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.
Latest accounts filed for Spotify Ireland Ltd show it had on average 15 staff here in 2022, with total payroll costs amounting to just more than €1.2 million. The entity was set up in February 2022 as a subsidiary to its Swedish parent group and made an after-tax loss that year of €172,622. It provides “intragroup support services” to Spotify.
But chief executive 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,” Mr Ek said in the statement. “More people need to be focused on delivering for our key stakeholders – creators and consumers.”
The company cut about 6 per cent of its workforce in January and another 2 per cent in June.
The company will focus on a leaner structure that will allow it to be more strategic about how it reinvests profits in the business, Mr Ek said. He will address the cuts on Wednesday with employees.
“Economic growth has slowed dramatically and capital has become more expensive,” Mr Ek said. “Spotify is not an exception to these realities.” – Bloomberg