Spotify to cut 1,500 employees in third layoff this year

File Picture

Music streaming giant Spotify said on Monday that it will lay off around 1,500 employees, or 17 per cent of its headcount, to bring down costs, after letting 600 of its staff go in January, and 200 more in June.

After a round of job cuts at the start of the year by tech companies, some have begun reducing their workforce again, with announcements coming from Amazon to Microsoft-owned LinkedIn.

In a letter to employees, Spotify CEO Daniel Ek said the company hired more in 2020 and 2021 due to the lower cost of capital and while its output has increased, much of it was linked to having more resources.

In the third quarter, the company swung to a profit, aided by price hikes in its streaming services and growth in subscribers in all regions, and the company forecast that its number of monthly listeners would reach 601 million in the holiday quarter.

Ek told Reuters at that time the company was still focusing on efficiencies to get more out of each dollar.

On Monday, he said a reduction of this size would feel large given the recent positive earnings report and its performance.

"By most metrics, we were more productive but less efficient. We need to be both," Ek said.

"We debated making smaller reductions throughout 2024 and 2025," he said. "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."

More from Business

  • UAE’s Global Future Trade Leaders graduates honoured

    In the presence of Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, Ahmed Jasim Al Zaabi, Chairman of the Abu Dhabi Department of Economic Development (ADDED), on Sunday honoured the first 30 graduates of the Global Future Trade Leaders Programme - a course designed to develop the Emirati trade negotiators of the future.

  • Dubai approves Creek enhancement project

    Dubai Municipality has implemented a project to rebuild and rehabilitate the supporting walls along the Deira side of Dubai Creek, with a total expense of AED 112 million.

  • UAE provides US$10 million grant to support WTO initiatives

    Sheikh Abdullah bin Zayed Al Nahyan, Minister of Foreign Affairs, has announced that the UAE will provide a US$10 million (AED 36.7 million) grant to support several key initiatives of the World Trade Organisation (WTO).

  • European Commission invests in 12 new environment projects

    The European Commission is investing over €233 million in twelve new strategic projects across Europe under the LIFE programme to support the implementation of the EU's environmental and climate ambitions.

  • ADQ to invest US$35 billion in Ras El-Hekma, Egypt

    The UAE Government, represented by a private consortium led by ADQ, an Abu Dhabi-based sovereign investor, will invest US$35 billion (AED 128.56 billion) in Ras El-Hekma, a coastal region 350 kilometres northwest of Cairo.