Spotify is Laying Off 17% of its Workforce

Spotify announced today that it’s laying off approximately 17% of its employees, which represents approximately 1,500 jobs. This is the third time the company has announced job cuts this year following two previous rounds in January and June.

Today’s news also comes just a couple of weeks after Spotify announced “strong results for its third quarter, with all of the company’s key performance indicators exceeding guidance. The company reported that monthly active users were up 26% to 574 million in Q3, with the number of paid subscribers crossing 226 million (up 16 percent year-over-year).

“I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance,” said Spotify CEO Daniel Ek in a note shared with Spotify employees. “We debated making smaller reductions throughout 2024 and 2025. 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 Spotify CEO explained that the company is still being impacted by the global economic slowdown and that it also grew too fast in 2020 and 2021 after taking advantage of lower-cost capital. And again, previous layoffs earlier this year were not enough to prepare the company for what’s next.

“Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact. More people need to be focused on delivering for our key stakeholders – creators and consumers. In two words, we have to become relentlessly resourceful,” the Spotify CEO wrote.

Spotify is committed to supporting its employees who have been laid off with approximately five months of severance pay, two months of career support, and other benefits. And the company also wants to send a reassuring message to the remaining employees.

“This is not a step back; it’s a strategic reorientation,” Ek said today. “We’re still committed to investing and making bold bets, but now, with a more focused approach, ensuring Spotify’s continued profitability and ability to innovate.”