In a surprising encore of employment acrobatics, Spotify has decided to part ways with about 1,500 employees, which constitutes roughly 17% of its workforce. This marks the third round of musical chairs for the streaming giant in 2023, as it tries to shimmy into a more “productive and efficient” groove.
Daniel Ek, Spotify’s dance captain and CEO, sent out a note to the soon-to-be-ex employees, highlighting the importance of the company shedding some weight to pirouette through the “challenges ahead.” He blamed the economic waltz, which seems to be slow-paced, and the rising costs of the capital tango as the prime reasons for this latest round of job-cut jive.
Ek admitted that many brilliant minds and hardworking souls would be leaving the Spotify stage, leaving the company feeling like a deserted dance floor. “To be blunt, many smart, talented, and hard-working people will be departing us,” Ek wrote in the note, later shared on the company’s blog.
Spotify, with its ensemble of about 8,800 employees, plans to notify the affected dancers later in the day. This move follows the earlier elimination of about 6% of jobs in June and a few hundred employees in January, making it clear that Spotify is serious about mastering the art of the lean and mean shuffle.
Despite hitting some high notes with strong user growth and surpassing Wall Street’s expectations in the most recent quarter, it seems Spotify is not completely immune to the occasional offbeat. The growth in North American premium subscribers was more of a casual cha-cha than a full-blown salsa, and there was a slight dip in the third-quarter premium average revenue per user (ARPU).
“I realize 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,” Ek said, contemplating whether to turn down the volume gradually. “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.”
The stage of industries globally has witnessed some serious layoffs this year, a grand total of over 225,000 employees doing the “unemployment hustle.” Economic volatility, higher interest rates, and unpredictable consumer dance moves seem to be the choreography of the times. Even the tech sector, with its heavyweights like Amazon, Google, Meta, Twitter, and Netflix, is feeling the rhythm of cutbacks, leaving employees feeling like they’ve stumbled on an uneven dance floor. The Spotify playlist of uncertainty is just one among many in this ballroom of economic unease.