Spotify to trim workforce by 6%, CEO announces

Spotify, the Stockholm, Sweden-headquartered music streaming and media services company, is one of the largest streaming providers in the world, with more than 400 million monthly active users. However, it recently announced employee layoffs that will affect six percent of its workforce.

Spotify said on Monday it will cut jobs, and its staff in various office locations will be affected. The company cited struggles amid the gloomy economic environment that has driven customers and advertisers to limit their spending.

The six percent who will lose their jobs is equivalent to about 600 workers, as the music streaming site has a total of 9,800 employees. Based on its LinkedIn profile, Spotify employs 1,900 people in Sweden, while 5,400 are based in the United States.

The latest round of layoffs was confirmed by the company’s chief executive officer and co-founder, Daniel Ek. He released a memo addressed to the staff but posted it publicly on Spotify’s web page.

“As we say in our Band Manifesto, change is the only constant and for this reason, I continue to reiterate that speed is the most defensible strategy a business can have but speed alone is not enough,” the Spotify chief said in the memo. “We must also operate with efficiency. It’s these two things together that will fuel our long-term success. With this in mind, I have some important news to share today.”

He added, “In a challenging economic environment, efficiency takes on greater importance so in an effort to drive more efficiency, control costs, and speed up decision-making, I have decided to restructure our organization. For those of you who are leaving, I thank you for everything you’ve done for Spotify and wish you every future success.”

Meanwhile, Spotify's shares soared more than three percent on Monday, Jan. 23, following its cost-cutting measures.

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