Spotify, a music streaming platform on Monday disclosed that it will reduce the number of its employees by around 17% in a bid to cut costs amid “dramatically” slower economic growth.
Spotify in October posted a rare quarterly operating profit of 32 million euros, compared to a loss of 228 million for the same period a year earlier, on the back of 26% growth in active users for the third quarter.
Chief Executive Officer and founder Daniel Ek wrote in a letter, "We still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact".
“I realise that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance.
He said that in 2020 and 2021, the company “took advantage of the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing and new verticals.”
“However, we now find ourselves in a very different environment. And despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big.”