Spotify, the audio streaming giant, is set to reduce its workforce by approximately 17%, according to a communication from CEO Daniel Ek to employees on December 4. This move represents the company’s latest effort to control costs despite posting a notable operating profit of €32 million in Q3 2023, marking its first profitable quarter in the last two years.
“I realise that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance. We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives,” Ek said in the note, which was later posted on Spotify’s website.
This round of job cuts follows a previous reduction of about 6% of Spotify’s global workforce in January 2023.
The CEO said that for many, a reduction of this size would feel surprisingly large given the company’s recent positive earnings report.
“We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives,” Ek added.
The company’s financial performance in the third quarter saw a return to profitability, attributed to increased subscription prices and a rise in subscribers across all regions. Spotify forecasts its monthly listeners to reach 601 million in the upcoming holiday quarter.
Departing employees will receive five months of severance pay, including healthcare support, as part of Spotify’s measures to support those affected by the workforce reduction.