Spotify will lay off around 17 percent of its employees in an effort to “cut costs,” according to an internal memo obtained by Music Business Worldwide.
In the memo sent to staff today, Spotify CEO Daniel Ek wrote, “Considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to right-size 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,” he continued, “To be blunt, many smart, talented and hard-working people will be departing us.”
Though it remains unclear exactly how many jobs will be cut, 17 percent of Spotify’s roughly 9,300 employees would total about 1,500 layoffs.
The announcement also marks the streaming giant’s third round of layoffs this year.
In January, Music Business Worldwide reported that Spotify cut over 500 jobs worldwide to reduce its total employees by close to six percent. Another round of job cuts in June decreased the company’s total workforce by an additional 2 percent, including 200 slashed positions in its podcast division.
Following a recent price hike for premium subscriptions in the United States, Spotify reported profits of close to $60 million this quarter and added six million premium subscribers, bringing their total paying customer base to 226 million.
The forthcoming round of Spotify layoffs will begin this January, with the company planning to inform each impacted employee by end of day, tomorrow, Tuesday, December 5.
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