NEWS

Spotify To Sack 17% Staff Members

Published

1 year ago

December 4, 2023

Fenton

Spotify, the music streaming company, has announced plans to lay off 17% of its workers.

The corporation made the announcement on Monday.

Spotify stated that the decision is a cost-cutting measure in the face of “dramatically” slower economic development.

Spotify reported a rare quarterly operational profit of 32 million euros in October, compared to a loss of 228 million in the same period the previous year, thanks to a 26% increase in active users during the third quarter.

“I realise that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance,” chief executive Daniel Ek wrote in a letter to employees, which was seen by AFP.

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.”

Since its inception, Spotify has made significant investments to drive development through expansions into new areas and, in later years, unique content such as podcasts.

It has spent nearly a billion dollars only on podcasts.

The firm employed roughly 3,000 employees in 2017, with the amount expected to more than triple to around 9,800 by the end of 2022.

Despite its success in the internet music business, the company has never produced a full-year net profit and only infrequently quarterly earnings.

Related Topics:lay off sack Spotify

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Fenton

Fenton is a talented and experienced news and entertainment writer at TopNaija, passionate about sharing stories that matter. With a keen eye for detail and a talent for crafting engaging and compelling content, he has built a strong reputation as a reliable and insightful writer. Fenton is a dedicated and talented writer committed to producing high-quality content that is informative, entertaining, and engaging.