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Spotify said it will reduce its workforce by about 17% amid economic growth slowdown.
“Economic growth has slowed dramatically and capital has become more expensive. Spotify is not an exception to these realities.” CEO Daniel EK said in a statement. “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.”
“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,” he pointed out.
Assessment
At the end of Q3 2023, Spotify had 9,241 full-time employees. That means a layoff of 17% would mean around 1,570 employees.
Based on announced severance payments, previous layoff data and indications that more junior roles are affected, we estimate that this reduction would probably lead to a cost-savings of around 250-300 Million in our slightly conservative base senario. We feel confident that cost savings are at least 200million and would not substantially be higher than 350million.