Spotify made another staff lay-off after this year it announced on Monday (December 4) that it would cut 1,600 jobs in the company, equivalent to 17% of its current total workforce.
Spotify CEO Daniel Ek said that he made the "difficult" decision with economic growth "dramatically" slowing.
The Stockholm-based company currently employed about 9,000 people, with Ek saying that, while the cuts would be "incredibly painful" to those affected, "substantial action to rightsize" its costs was needed to allow the firm to meet its objectives.
"I recognize this will impact a number of individuals who have made valuable contributions," he said. "To be blunt, many smart, talented and hard-working people will be departing us."
Spotify said it would start informing affected employees by Monday. They would be able to get about five months of severance pay, holiday pay, and healthcare coverage for the severance period.
The company would also offer immigration support for employees whose immigration status was connected to their employment, especially or its headquarters and offices in Sweden.
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Making Spotify Cost-Effective
The announcement was made about six months after it cut 200 jobs in its podcast department.
In its third quarter results, Spotify reported a profit of €65 million ($70.7 million) - its first figure on the black for over a year - thanks to price rises and higher subscriber numbers.
Spotify has been aiming to expand its global reach, with a goal of reaching a billion users by 2030. Currently, it has 601 million, an increase from 345 million by the end of 2020.
Ek stated that the latest results would make the job cuts "feel surprisingly large" for many people.
He added that the company would consider making smaller job cuts by 2024 and 2025.
Other factors that affected Spotify's decision to let go of some staff included securing exclusive content, such as the podcast created by Prince Harry and Meghan, Duke and Duchess of Sussex. The deal with the estranged son and daughter-in-law of King Charles III cost a reported $25 million over a span of just 12 episodes before the deal ended in June.
"The truth of the matter is some of it has worked, some of it hasn't," Ek told the BBC last September.
2023 was a year where major tech companies have reduced their staff numbers following a boom during the COVID-19 pandemic lockdowns.
Some companies that laid off their employees include giants like Meta, Microsoft, Amazon, and Google's parent firm, Alphabet.
Related Article: Spotify Cuts 200 Jobs in Podcast Department in Reorganization Plans
