Spotify to Reduce 1,500 Jobs in Third Spherical of Layoffs this 12 months

Spotify mentioned on Monday that it will minimize practically a fifth of its work drive, at the least the third spherical of layoffs this yr, because it has struggled to change into constantly worthwhile after spending aggressively to develop past music streaming into areas comparable to podcasting.

Spotify’s chief government officer, Daniel Ek, wrote in a note to employees posted on the corporate’s web site that the platform now wanted to “rightsize” to account for a “very completely different surroundings.” Spotify will let go of about 1,500 individuals, or 17 p.c of its workers.

“Financial progress has slowed dramatically and capital has change into costlier,” Mr. Ek mentioned. “Regardless of our efforts to scale back prices this previous yr, our value construction for the place we must be remains to be too large,” Mr. Ek added.

Regardless of being the most important music streaming platform, Spotify has lengthy struggled to be worthwhile due to the phrases of licensing offers it has with file labels and music publishers. The corporate has pushed into new areas like podcasting, together with shopping for the podcast studios Gimlet for $230 million in 2019 and The Ringer for about $200 million in 2020. It struck costly offers with well-known figures comparable to former President Barack Obama and first woman Michelle Obama, in addition to Prince Harry and spouse, Meghan. Extra not too long ago, the corporate has expanded into audiobooks.

The shifts have helped Spotify entice listeners and subscribers, however haven’t been a monetary breakthrough. Within the first 9 months of 2023, Spotify lost $462 million, greater than double the loss in the identical interval in 2022.

However the firm turned a small revenue final quarter, its first in additional than a yr, in what Paul Vogel, its chief monetary officer, on the time referred to as “an necessary inflection level for the enterprise.” Spotify had 226 million paying subscribers on the finish of September and is on observe so as to add 30 million for the total yr, 50 p.c greater than it anticipated on the outset of 2023. The corporate not too long ago raised costs for its subscriptions in additional than 50 international locations.

The roles cuts are the most important Spotify has introduced this yr. In June, Spotify minimize about 200 jobs, together with many concerned in podcasting. One other 600 staff had been let go in January.

As a part of its leaving package deal for the job cuts introduced on Monday, Spotify mentioned a mean worker would obtain about 5 months of severance pay.