Spotify ends 2023 with more mass layoffs as CEO Daniel Ek announces 3rd round of job cuts

Music streaming giant Spotify began 2023 announcing layoffs and it is ending the year in the same way. Today, Spotify CEO Daniel Ek sent a memo to employees saying that an additional 17% of staff would be laid off this week. Seventeen percent of its workforce is about 1,500 personnel. 

Spotify laid off roughly 600 people, or 6% of its staff, in January 2023. In June 2023, Spotify laid off an additional 2% of its then-workforce, or about 200 people. The third round of job cuts announced today dwarf the previous two combined.

Ek’s memo to employees announcing a third round of cuts was published on Spotify’s blog shortly after it was sent to employees. In the memo, Ek notes that economic growth has “slowed dramatically” for companies, while at the same time, capital has become more expensive. In order to help combat this, Ek wrote, “I have made the difficult decision to reduce our total headcount by approximately 17% across the company.”

Spotify originally considered making smaller reductions to its workforce over the next two years instead of the 17% reduction announced today, Ek added, yet due to the gap between Spotify’s financial goal and its current operational costs, the more aggressive layoff option was the “best” option to meets Spotify’s objectives.

Ek also blamed significant hiring in 2020 and 2021 for today’s layoffs. The increase in headcount during the early pandemic years did not make the company more efficient, said Ek. “By most metrics, we were more productive but less efficient. We need to be both . . . Today, 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.”

Ek did not specify which teams at Spotify would bear the brunt of the layoffs or if they would be spread evenly across the company. He also did not specify if the layoffs would hit one geographic area more than others. Spotify employs workers in its native Sweden, as well as workers in Europe, the United States, and additional countries.

Employees who are being laid off will reportedly receive an email today requesting that they meet with Spotify HR. Those meetings will conclude by the end of the day on Tuesday. 

Ek closed his memo by saying that the Spotify of the future must be “relentlessly resourceful” adding that a leaner Spotify “will also allow us to invest our profits more strategically back into the business . . . offering greater opportunities for success.”