We got to have some fun with Wrapped last week, but Spotify has now returned to business as usual: the company has laid off 17 percent of its workforce — about 1,500 jobs — in its third round of layoffs this year.
The news was shared by CEO Daniel Ek in a blog post, which saw the leader of the streaming giant explain that "economic growth has slowed dramatically and capital has become more expensive."
Ek traced the decision to make the cuts back to investments Spotify made in 2020 and 2021, having taken advantage of "the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing, and new verticals." He added that the company had debated making smaller rounds of cuts in 2024 and 2025, but ultimately decided that they had to commit to today's wider layoffs.
"The decision to reduce our team size is a hard but crucial step towards forging a stronger, more efficient Spotify for the future," Ek wrote. "Embracing this leaner structure will also allow us to invest our profits more strategically back into the business." Spotify claims to be offering employees five months of severance in addition to paying out their unused PTO.
The streaming service had previously made layoffs in January and June, which resulted in the termination of about 800 employees. Last month, Spotify announced that it would be ending service in Uruguay after the passing of a bill requiring fair pay for artists; the company believes that the change in the country's copyright would force them to "pay twice" the amount of royalties, which means a Uruguayan "Weird Al" Yankovic might get two sandwiches.
The news was shared by CEO Daniel Ek in a blog post, which saw the leader of the streaming giant explain that "economic growth has slowed dramatically and capital has become more expensive."
Ek traced the decision to make the cuts back to investments Spotify made in 2020 and 2021, having taken advantage of "the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing, and new verticals." He added that the company had debated making smaller rounds of cuts in 2024 and 2025, but ultimately decided that they had to commit to today's wider layoffs.
"The decision to reduce our team size is a hard but crucial step towards forging a stronger, more efficient Spotify for the future," Ek wrote. "Embracing this leaner structure will also allow us to invest our profits more strategically back into the business." Spotify claims to be offering employees five months of severance in addition to paying out their unused PTO.
The streaming service had previously made layoffs in January and June, which resulted in the termination of about 800 employees. Last month, Spotify announced that it would be ending service in Uruguay after the passing of a bill requiring fair pay for artists; the company believes that the change in the country's copyright would force them to "pay twice" the amount of royalties, which means a Uruguayan "Weird Al" Yankovic might get two sandwiches.