Music streaming giant Spotify said on Monday it will slash the number of its employees by around 17 per cent to cut costs amid anticipated slower economic growth.
The development comes despite the company posting a rare quarterly operating profit of 32 million euros, compared to a loss of 228 million euros for the same period a year earlier, on the back of 26 per cent growth in active users for the third quarter.
“I realise that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance,” chief executive Daniel Ek wrote in a letter to employees, sighted by a news agency.
He said that in 2020 and 2021, the company “took advantage of the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing, and new verticals.”
Spotify has invested heavily since its launch to fuel growth with expansions into new markets and, in later years, exclusive content such as podcasts.
It has invested over one billion dollars in podcasts alone.
In 2017, the company had around 3,000 staff members, which had more than tripled to about 9,800 at the end of 2022.
Despite its success in the online music market, the company has never posted a full-year net profit and only occasionally posted quarterly profits.
Despite €30m profits in October, Spotify mulls 17% job cuts
