Heaptalk, Jakarta — A global music streaming company, Spotify, has performed its latest layoff wave, impacting about 1,500 workforces, or approximately 17% of the total employees, to adjust its operational expenses.
According to the CEO of Spotify, Daniel Ek, this music streaming platform has emphasized growing its business into a significant and sustainable business. While the company has made worthy strides, he perceived that the internal team still has multiple matters to do. Moreover, economic growth has slowed, and the capital continues to elevate.
“This issue brings me to a decision that will mean a significant step change for our company. To align Spotify with our future goals and ensure we are right-sized for the challenges ahead, I have made the difficult decision to reduce our total headcount by approximately 17% across the company,” added Daniel on the company’s official website.
In 2020 and 2021, Spotify has invested significantly in team expansion, content enhancement, marketing, and new business verticals, which is claimed to contribute to the platform’s increased output. Moreover, this music streaming app also gained a total revenue of US$3.5 billion last year. On the other hand, this app also recorded about 489 million Monthly Active Users, with around 205 million premium users.
“Looking back on 2022 and 2023, what we have accomplished has been impressive. But concurrently, much of this outcome was linked to having more resources. By most metrics, we were more productive but less efficient. We need to be both. While we have done some work to mitigate this challenge and become more efficient in 2023, we still have a way to go before we are both productive and efficient,” added Daniel Ek.
Following the newest Spotify layoff decision, the company will take responsibility devoted to the laid-off employees, including:
- Severance pay: Spotify’s employees will obtain this facility approximately five months of severance that will be calculated based on local notice period requirements and employee tenure.
- Healthcare: the company will continue to cover health insurance for the affected workforce during their severance period.
- Immigration support: Spotify’s Human Resource Business Partner will assist its employees whose immigration status is connected with their employment.
- Career support: All impacted employees receive outplacement services for two months.
“For those leaving, we are a better company because of your dedication and hard work. Thank you for sharing your talents with us. I hope you know that your contributions have impacted more than half a billion people and millions of artists, creators, and authors around the world in profound ways.” Daniel Ek said.
Slowing world economic growth has impacted multiple sectors, resulting in employee reductions to maintain operational cost efficiency. In this case, Spotify is known to have performed the early layoff of its 600 workforces last January 2023 and 200 employees in the podcast business unit in October this year.
