Spotify is to cut about 17% of its global workforce, the music-streaming giant announced on Monday.
It comes despite the company reporting a profit of €65m (£55.7m) for the three months to September — its first quarterly profit for more than a year.
Chief executive Daniel Ek acknowledged that the decision “will feel surprisingly large” for many, given Spotify’s recent positive earnings report and its performance.
However, he said that in 2022 and 2023 the company was “more productive but less efficient. We need to be both.”
Ek added that “considering the gap between our financial goal state and our current operational costs” he had concluded that “a substantial action to rightsize our costs was the best option to accomplish our objectives”.
Spotify employs about 9,000 people, so the latest job cuts are expected to affect around 1,500 employees.
“I recognise this will impact a number of individuals who have made valuable contributions,” Ek said. “To be blunt, many smart, talented and hard-working people will be departing us.”
All those leaving the company will get about five months of severance pay, accrued and unused holiday pay, and healthcare coverage for the severance period.
Spotify will also provide immigration support to employees whose immigration status is connected with their employment.
