Spotify Embarks on Third Round of Layoffs, Slashing 17% of Workforce

Spotify has announced the termination of 17% of its worldwide personnel, the music streaming service's third wave of layoffs this year, as it works to cut expenses while concentrating on profitability.

CEO Daniel Ek stated in a statement to staff posted on the company's site Monday that the jobs were being eliminated as part of a "strategic reorientation." The post did not indicate how many employees would lose their jobs, but a spokeswoman verified that it amounted to roughly 1,500 individuals.

However, Ek stated that the corporation was taken off guard when central banks began raising interest rates last year, which may hamper economic development. He described both as a difficulty.

Ek stated that the company's "leaner structure" will assure "Spotify's continued profitability."

Spotify, situated in Stockholm, reported a financial loss of 462 million euros (about $500 million) for the nine months ending in September.

Spotify's Position in the Podcasting Industry

According to a memo from Elhabashi, the company is expanding its partnership efforts with leading podcasters globally, employing a tailored approach optimized for each show and creator. This shift from a more uniform proposition is aimed at better supporting the creator community. However, this transformation necessitates adaptation, leading the senior leadership team to collaborate closely with HR over the past few months. Consequently, Spotify has made the difficult but deemed necessary decision to strategically realign its group, resulting in a reduction of approximately 200 people, or 2% of the company's workforce, particularly in the global podcast vertical and other functions.

Following Ostroff's departure, Elhabashi, who joined Spotify in 2018, reports to Spotify co-president Alex Norström. Julie McNamara, VP and head of global podcast studios, will continue to lead the Spotify Studios group, with Liliana Kim in charge of current content and Liz Gateley as head of development.

Bill Simmons will continue as managing director of The Ringer -- which Spotify acquired in early 2020 -- and head of podcast innovation and monetization. In addition, Elhabashi said, Spotify will continue to expand its teams that support podcast creator partnerships under Bryan Thoensen, head of content partnerships, "as we increase our focus on the millions of creators building audiences and businesses on our platform."

In addition to announcing Spotify's recent layoffs, Elhabashi emphasized the company's position in the podcasting industry. According to Edison Research statistics, Spotify is the most-used audio podcast platform in most parts of the world, and it is the No. 1 podcast publisher in the United States in terms of reach. Spotify has over 100 million podcast listeners in total; the number of podcast titles on the site has expanded from 200,000 in 2019 to more than 5 million now.

The corporation declared in January that it was laying off 6% of its overall workforce. In June, it eliminated another 2% of its workforce, or around 200 people, primarily in its podcast section.

This year, IT corporations such as Amazon, Google, Microsoft, Meta, and IBM have announced hundreds of thousands of job cutbacks.