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Spotify announces employee layoffs amid organizational restructuring

What you need to know

  • Spotify CEO Daniel Ek has announced that the company is laying off a number of employees.
  • Spotify is cutting its employee base by about 6%, which amounts to roughly 600 people.
  • Ek explains that Spotify needs to become more efficient as he details organizational restructuring.

Companies have been announcing major layoffs left and right as a sign that economic struggles aren't improving. The latest to cut its workforce is Spotify, which announced this week that it is reducing its employee base by roughly 6%.

Spotify CEO, Daniel Ek, writes in a memo on the company's website that Spotify needs to become more efficient as its current pacing has proven unsustainable in the current economic climate. Ek says he takes “full accountability for the moves that got us here today,” stating he was “too ambitious in investing ahead of our revenue growth.”

According to CNBC, Spotify employed nearly 10,000 workers, meaning the reduction would see about 600 employees cut. Ek said that one-on-one conversations would occur with affected employees and that they could expect benefits such as an average of five months of severance pay, healthcare, immigration support, and more.

“And while I believe this decision is right for Spotify, I understand that with our historic focus on growth, many of you will view this as a shift in our culture,” Ek writes. “But as we evolve and grow as a business, so must our way of working while still staying true to our core values.”

As a result, Spotify is also restructuring its business in a way that may help run things more efficiently. Engineering and product work will now fall under Gustav Söderström, while business work will fall under Alex Norström, both of whom report directly to Ek and will help him run the day-to-day.

Dawn Ostroff, who served as Spotify's chief content officer, is also departing the company. Ek credits Ostroff with boosting Spotify's ad business and spearheading its podcast content.

“In almost all respects, we accomplished what we set out to do in 2022 and our overall business continues to perform nicely. But 2023 marks a new chapter. It's my belief that because of these tough decisions, we will be better positioned for the future. We have ambitious goals and nothing has changed in our commitment to achieving them.”

Ek finishes by teasing a “steady stream of innovations” coming to the platform, and he plans to share more in the coming weeks.

Spotify's announcement follows a string of layoffs from major companies such as Google, Microsoft, Amazon, Meta, and more. Each of these companies has announced layoffs of around 10,000 employees or more, with Amazon's number reaching closer to 20,000.

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