Spotify is set to slash 17% of its total global workforce, according to a Monday blog post from founder and CEO Daniel Ek, the audio streaming giant’s latest move toward achieving profitability.
The Stockholm, Sweden-based company says about 1,500 workers will be affected. They follow a January reduction of 600 workers from its podcast division, and another 200 in June.
“Over the last two years, we’ve put significant emphasis on building Spotify into a truly great and sustainable business – one designed to achieve our goal of being the world’s leading audio company and one that will consistently drive profitability and growth into the future,” Ek wrote. “While we’ve made worthy strides, as I’ve shared many times, we still have work to do. Economic growth has slowed dramatically and capital has become more expensive. Spotify is not an exception to these realities.”
The latest cuts signal that Spotify is doubling down on its push to profitability, after reporting an operating profit and strong subscriber gains last month. The service reported 226 million premium subscribers in October, up from 220 million in mid-summer, shooting past even its own lofty expectations.
“I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance,” Ek wrote. “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.”
Ek detailed a robust, five-month severance package for departing employees, including continuing health insurance coverage and “immigration support” for employees who relocated outside their home countries.
He acknowledged the company’s sprint forward in 2020 and 2021, when “we took advantage of the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing and new verticals.”
“These investments generally worked,” he continued, but “we now find ourselves in a very different environment. And despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big.”