Spotify CEO Daniel Ek announced a significant reduction in the company’s headcount equivalent to about 17%. This decision comes after a reported 65 million euros ($70.7 million) profit in the third quarter, which cited lower spending on marketing and staff. Ek explained that the move is necessary to align Spotify’s cost structure with its financial goals in light of a challenging economic environment.
In a message to the team, Ek recognized the impact this decision will have on many talented and hard-working individuals and expressed gratitude for their contributions. The decision was made based on the need to right-size costs and become more efficient as a company. Ek emphasized the importance of assessing Spotify objectively and acknowledged the accomplishments made in previous years, while also recognizing the need for a more lean and streamlined approach in the future.
Impacted employees will receive severance pay, paid time off, continued healthcare coverage, and career support. Ek also assured the remaining team members that the decision was made with the future of the company in mind, focusing on forging a stronger and more efficient Spotify and preparing for a new phase of lean, impactful growth.
Looking ahead, Ek emphasized the importance of embracing a leaner structure and a more focused approach to investments and initiatives, while reaffirming his commitment to Spotify’s mission and belief in the company’s ability to achieve it. The CEO invited team members to join him for a discussion on moving forward and assured them that 2024 will mark a new chapter for the company as it builds an even stronger Spotify.
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