Spotify CEO Daniel Ek announced a 17 per cent workforce reduction due to financial difficulties. The company will pay severance and offer support to affected employees.
CEO Daniel Ek announced on Monday that Spotify is cutting its workforce by 17 per cent on Monday.
The music streaming platform will lay off 1,500 employees, mostly in the US, due to the financial challenges it faces.
Ek said he made the cuts now rather than gradually over the next two years. Affected employees will be notified and will receive severance pay and other support.
“This decision was not easy, and I know it will be incredibly painful for our team,” Ek wrote in a press release.
“We grew significantly in 2020 and 2021, thanks to our investments and the lower cost of capital. However, our cost structure is still too big for our financial goals, and we need to be leaner to succeed in the next phase of our journey.”
Spotify has 574 million monthly active users, up 26 per cent year-over-year, but has struggled to make a profit.
In November, Spotify introduced a new royalty model that aims to reward “working artists” and reduce fraudulent streams.
