Spotify announces massive layoffs, 17% of workforce to be cut

In a surprising move just before the holiday season, music and podcast streaming platform Spotify has announced a it would be laying off around 1,500 employees, CEO Daniel Ek said in a press release. 

Ek explained that these cuts were necessary to tackle the challenges the company is expecting to face, and he opted for immediate action instead of gradual reductions over time. Affected employees will be notified within the next day.

Acknowledging the size of these layoffs, Ek stated, "I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance."

Why is Spotify laying off 17% of its workforce?

He continued, "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. While I am convinced this is the right action for our company, I also understand it will be incredibly painful for our team."

Ek also highlighted the substantial growth Spotify has experienced in 2020 and 2021. Despite previous layoffs in early 2023 (6% reduction) and in May (2% reduction), the company's cost structure still needs further adjustment. 

Currently employing approximately 9,000 people, Spotify's upcoming cuts will result in the loss of around 1,500 jobs. To alleviate some of the impact, Ek announced that Spotify would provide an average of five months' severance pay, continue health insurance coverage during that period, and offer immigration assistance.

The popular streaming app currently boasts 574 million monthly active users.