Daniel Ek, CEO of Swedish music streaming service Spotify, in 2016. On Monday, Ek introduced Spotify would layoff 17% of staff.

Toru Yamanaka/AFP through Getty Images

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Toru Yamanaka/AFP through Getty Images

Daniel Ek, CEO of Swedish music streaming service Spotify, in 2016. On Monday, Ek introduced Spotify would layoff 17% of staff.

Toru Yamanaka/AFP through Getty Images

The music streaming big Spotify has introduced it is reducing 17% of its workforce in a dramatic transfer aimed toward slashing prices.

In a memo addressed to staff, CEO Daniel Ek mentioned it was crucial that the corporate “rightsize” its monetary scenario after hiring too many individuals in 2020 and 2021, when capital was cheaper.

“The Spotify of tomorrow must be defined by being relentlessly resourceful in the ways we operate, innovate, and tackle problems,” Ek wrote. “This kind of resourcefulness transcends the basic definition — it’s about preparing for our next phase, where being lean is not just an option but a necessity.”

The spherical of cuts — the third this 12 months — equates to about 1,500 jobs, according to a CNBC supply that mentioned the Swedish firm presently employs about 9,000 individuals throughout greater than 40 international workplace places.

Across the tech industry, tens of hundreds of positions have been reduce within the final 12 months as a pandemic-era boon continues to fade. According to the tech job tracker layoffs.fyi, greater than 250,000 tech employees have been laid off because the begin of the 12 months.

Still, the dimensions of the Spotify cuts might really feel “surprisingly large” for the second, Ek wrote.

The firm posted $34 million in working earnings throughout its third-quarter earnings call, its first quarterly revenue since 2021. Lower personnel prices, pushed by two smaller rounds of cuts, was one of many cost-saving elements.

The firm reduce 6% of its workforce, about 600 staff, in January. It laid off another 2% of staff, roughly 200 roles, in June.

At the identical time, Spotify has raised costs on its subscription plans and has launched new expansions in audiobooks and podcasts. It set a aim to achieve a billion customers by 2023, and presently has over 570 million of them. That’s rather less than double the variety of listeners the platform attracted in 2020.

As of 8:30 a.m., the company’s shares have been up about 5% in premarket buying and selling.

Departing staff will probably be provided roughly 5 months of severance pay plus healthcare protection, trip pay, immigration help and two months’ price of career-search help, in accordance with Ek’s assertion.