Spotify is by far the biggest music streaming platform worldwide. Although Amazon Music and Apple Music are at close odds, no one could deny the impact that Spotify has brought to the music industry and the media landscape in general.
As the streaming age becomes apparent, Spotify has led the way for years. However, as many would believe as streaming has been necessitated, the streaming giant would have no problem with human resources. Sadly, that's the other way around.
Spotify Q4 Layoffs
According to a memo that CEO Daniel Ek has sent to its thousands of workers worldwide, the move to ax 17% of their global workforce is a "crucial step" for a bigger effort to be "relentlessly resourceful." (via Billboard)
Apparently, the 17% slash was equivalent to roughly 1,500 jobs from the company, which now puts its 9,241 employees at a huge cut.
This Spotify layoff was actually the third round of layoffs this year. Last January 2023, they slashed 6% of their global workforce, impacting more than 600 people on their podcast division. In June 2023, around 200 people or 2% was also sacked.
Ek revealed that despite the huge impact of Spotify worldwide, the global operation has remained "too big" and that "considering the gap between our financial goal and our current operational costs," Ek decided that a substantial action to rightsize the company's costs was the "best option" to accomplish our objectives."
"To understand this decision, I think it is important to assess Spotify with a clear, objective lens," Ek added. "In 2020 and 2021, 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, contributing to Spotify's increased output and the platform's robust growth this past year. However, 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."
READ ALSO: Spotify Layoffs Continues In Q3 2023 Despite Premium Price Increase
What Will Spotify Give Their Fired Employees?
According to Billboard, Spotify will be giving out a "baseline of five months of severance pay and other benefits, including payouts of all vacation pay."
Ek had this to say: "For those leaving, we're 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."
READ ALSO: TikTok Can Now Let You Save Songs Through Spotify, Apple Music, Amazon
