CEO Daniel Ek dropped some big news on Monday: Spotify going to kick out about 1,500 employees. They’re trying to save money and switch up how they do things at the music-streaming company.
What’s Up at Spotify
Ek explained in a letter to the staff that the world’s been going through a tough time economically, and money isn’t as easy to get as before. That’s hitting Spotify too, so they’re making some changes.
Why the Layoffs?
Spotify’s trying to be more like a startup again. They went on a hiring spree and spent a lot to get millions of subscribers, but that didn’t make them loads of money regularly. They want to fix that.
Ek thought about doing smaller layoffs next year or in 2025, but he figured they needed to make a big move now to fix their money problems.
The Tough Part
He was straight about it: a bunch of good people are losing their jobs. The company’s going to talk to each person individually before Tuesday ends. Everyone leaving will get about five months’ pay as severance.
Spotify’s Previous Cuts
This isn’t the first time Spotify’s said goodbye to some of its crew. Back in January, they let go of over 500 folks, joining other big companies like Microsoft and Amazon who also cut jobs when things slowed down globally. In June, they axed 200 more from their podcast team.
Why’s This Happening?
During the pandemic, lots of big tech companies went on a hiring spree because everyone was online shopping and doing video calls like crazy. But now, with prices going up and money getting tighter, these companies are having to let people go.
Spotify did pretty well last year, adding 6 million new subscribers from June to September. That’s more than they thought they would. But even with that, they only made a profit of $34.8 million during that time. Last year, they were in the red with a $248 million loss. Right now, they have 226 million subscribers in total.
The Plan Ahead
Ek said Spotify still needs to get better at working efficiently. He thinks they’ve gotten a bit too big and not focused enough on helping creators and users. They want to become more resourceful and work smarter.
This isn’t just a step back; it’s a plan to change things up for the better. With this many people leaving, Spotify’s going to have to switch up how they do things. They’ll share more about this in the coming days.
Spotify’s trying to tighten things up and get back to their startup vibes. It’s tough because lots of great people are losing their jobs, but the company’s hoping this move will help them do better and be more efficient in the long run.