Spotify Announces Cutting 17 Per Cent Workforce Globally. This Is What CEO Daniel Ek Wrote To Employees

With almost 10,000 employees, Spotify's decision to lay off is expected to affect more than 1,500 individuals.

This move comes as a cost-cutting measure amid significantly slower economic growth.

Music streaming giant Spotify announced it is planning to trim around 17 per cent of its overall workforce as a cost-cutting measure amid significantly slower economic growth. As conveyed in a message by Spotify CEO Daniel Ek to staff on December 4, this step reflects the company's ongoing commitment to cost management. This move comes despite Spotify achieved a noteworthy operating profit of €32 million in the third quarter (Q3) of 2023, also its first profitable quarter in the past two years.

Ek's note to Spotify staff read: "Over the last two years, we’ve put significant emphasis on building Spotify into a truly great and sustainable business – one designed to achieve our goal of being the world’s leading audio company and one that will consistently drive profitability and growth into the future. While we’ve made worthy strides, as I’ve shared many times, we still have work to do. Economic growth has slowed dramatically and capital has become more expensive. Spotify is not an exception to these realities."

"I realise that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance. We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives." 

With almost 10,000 employees, Spotify's decision to lay off is expected to affect more than 1,500 individuals, with notifications to the affected employees scheduled to be sent later in the day.

The company CEO, in the note, reflected on 2022 and 2023, and mentioned that Spotify's achievements have been "remarkable". A significant portion of this success is tied to having increased resources. The company was more productive by many measures, but noted that efficiency also needs to be a priority moving forward.

"I know you will all be anxious to hear the next steps about how this process will work. If you are an impacted employee, you will receive a calendar invite within the next two hours from HR for a one-on-one conversation. These meetings will take place before the end of the day on Tuesday," Ek further noted.

Spotify has mentioned it will "start with a baseline for all employees, with the average employee receiving approximately five months of severance", which will be calculated based on local notice period requirements and employee tenure.