Spotify cuts 1,500 jobs in 'strategic reorientation' aimed at reducing costs

Spotify is cutting about 1,500 jobs as it cuts its worldwide workforce by 17% to reduce costs. The aim is for profits to be invested back into the business as the company undergoes a "strategic reorientation".

The news comes after Spotify’s audiobooks expansion in October, offering premium users 15 free hours a month in the UK and Australia, expanding to the US in November. It remains to be seen how efforts to reduce costs may affect negotiations on audio deals with publishers. 

In a statement released by the company today, 4th December 2023, c.e.o. Daniel Ek outlined the company’s organisational restructure and the challenges faced by the tech giant. Spotify recently reported quarterly profits of €65m (£55.7m) and Ek acknowledged that "a reduction of this size will feel surprisingly large given the recent positive earnings report".

"When we look back on 2022 and 2023, it has truly been impressive what we have accomplished," he said. "But, at the same time, the reality is much of this output was linked to having more resources. By most metrics, we were more productive but less efficient."

The c.e.o. added that the company has "to be both" productive and efficient going forward and that it needs to be "relentlessly resourceful" to achieve this. This was also repeated elsewhere in the statement, as Ek described that the company has "moved too far away from this core principle of resourcefulness" from when it first started out. 

"Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact," Ek explained. "More people need to be focused on delivering for our key stakeholders—creators and consumers."