The wave of layoffs in tech companies continues to advance, leaving significant devastation in its wake. After major companies like Microsoft or Amazon decided to downsize their workforce in recent months, it was expected that other “smaller” companies would follow suit. Now, it’s the turn of the music streaming queen, Spotify, which has announced it will lay off 17% of its global workforce to cut costs.
“I recognize that this will impact a number of people who have made valuable contributions,” said Spotify’s CEO, Daniel Ek, in an internal note sent to employees and published on the company’s blog. “To be frank, many smart, talented, hardworking people will be leaving us.”
Currently employing over 9,000 people globally, Spotify’s layoffs will affect around 1,500 workers. Despite the music streaming service’s consistent subscriber growth, boasting 220 million paying users, it continues to struggle with profitability.
“Considering the gap between our financial goals and our current operating costs, I concluded that a significant action to resize our costs was the best option to meet our goals,” Ek continued.
Back in July, Spotify’s Chief Financial Officer, Paul Vogel, hinted at further layoffs during an earnings presentation: “The second quarter was the last one where the number of employees increased compared to the previous year, and we expect the number of employees to decrease in the third quarter.”
“We continue to be more efficient and are very pleased with our position, so part of that efficiency will have an even greater impact in the latter half of the year in terms of operating expenses.”