Spotify is shedding 17% of its international workforce with a view to minimize prices, CEO Daniel Ek mentioned on Monday.
According to the Financial Times, Ek made the announcement in an inner memo despatched to workers. “I acknowledge it will influence quite a few people who’ve made precious contributions,” Ek wrote within the memo. “To be blunt, many good, proficient and hard-working folks will likely be departing us.”
Spotify at present employs over 9,000 folks globally, that means the layoffs will influence round 1,500 employees. Though the music streamer has achieved regular subscriber development, boasting 220 million paying subscribers, it has nonetheless struggled to change into worthwhile.
“Considering the hole between our monetary aim state and our present operational prices, I made a decision {that a} substantial motion to rightsize our prices was the best choice to perform our aims,” Ek continued.
CFO Paul Vogel hinted that extra layoffs had been to come back throughout an earnings name in July. “Q2 was final quarter the place we had headcount larger yr over yr, and we anticipate our yr over yr headcount to be down in Q3 — we’ll see the place that goes going ahead,” he mentioned. “We’re persevering with to be extra environment friendly and really feel actually good about the place we’re, so you will notice a few of that effectivity have much more of an influence within the again half of the yr with respect to the op-ex.”
Earlier this yr, Spotify minimize 6% of its workforce and laid off a further 200 workers in June. As the corporate has grown, Ek concluded, it has “moved too distant from this core precept of resourcefulness.”
