Spotify to lay off 17% of global employees in downsizing

In a significant move within the tech industry, Spotify, the audio streaming giant, has disclosed plans to dismiss 17% of its workforce. This decision marks the third round of job cuts at the company, following prior layoffs of 600 employees in January and an additional 200 in June of the same year.

CEO Daniel Ek conveyed this decision in a blog post, stating, “To align Spotify with our future goals and ensure we are right-sized for the challenges ahead, I have made the difficult decision to reduce our total headcount by approximately 17% across the company."

Expressing acknowledgment of the impact on valuable contributors, Ek mentioned, "Many smart, talented, and hard-working people will be departing us."

Assurances were provided for impacted employees, detailing a support package comprising severance, paid time off (PTO), healthcare coverage throughout the transition period, immigration assistance, and career support.

Ek emphasized that this restructuring aimed at a more streamlined organizational structure would enable strategic reinvestment of profits into the business. “With a more targeted approach, every investment and initiative becomes more impactful, offering greater opportunities for success. This is not a step back; it’s a strategic reorientation."

The company's move aligns with its pursuit of leaner structures to drive more impactful business decisions. Ek emphasized, "Lean doesn’t mean small ambitions; it means smarter, more impactful paths to achieve them."

Amidst these strategic changes, Spotify initiated a global media pitch while currently working with Lodestar UM, the incumbent agency handling its media planning and buying business. Although not confirmed by the company, an industry insider revealed to e4m, "It is one of the biggest global pitches of the year, and all major agencies are aggressively vying for the account."