Music streaming giant Spotify said today it would reduce the number of its employees by around 17% in a bid to cut costs amid “dramatically” slower economic growth.
Spotify in October posted a rare quarterly operating profit of 32 million euros, compared to a loss of 228 million for the same period a year earlier, on the back of 26% growth in active users for the third quarter.
Chief executive Daniel Ek wrote in a letter to employees that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and spotify’s performance.
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.”
Spotify has invested heavily since its launch to fuel growth with expansions into new markets and, in later years, exclusive content such as podcasts.
It has invested over one billion dollars into podcasts alone.
In 2017, the company had around 3,000 staff members, more than tripling the figure to around 9,800 at the end of 2022.
Despite its success in the online music market, the company has never posted a full-year net profit and only occasionally quarterly profits.
