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Spotify to Cut 20% of Workforce Despite £55.7 Million Profit

 


In its most recent quarterly report, Spotify declared a profit of £55.7 million ($70.3 million) and announced an increase in its member base. However, the company is set to lay off approximately 1,500 employees in its third wave of layoffs this year.


 


The third round of layoffs, affecting around 17% of the current 9,300 employees, comes after the release of 200 personnel in June and 600 more in January.


 


It remains uncertain how much employment will be impacted in the UK, where Spotify employs 881 workers, potentially putting around 150 positions at risk.


 


Despite reporting a profit for the three months ending in September, Spotify's first in a year, and a surge in subscribers, the company is taking substantial action to rightsize its costs. The streaming giant now boasts 601 million users, a notable increase from 345 million at the end of 2020.


 


Spotify's CEO, Daniel Ek, stated that the company plans to hire additional people in 2020 and 2021. However, he acknowledged the need for significant cuts to operational costs to align with financial goals. The layoffs aim to "build an even stronger Spotify" in 2024.


 


Affected employees will receive approximately five months of severance pay, and the company will offer immigration assistance to those whose visas are tied to their employment.


 


Despite recent investments exceeding a billion dollars in its podcast business, attracting celebrities like Kim Kardashian, Prince Harry, and Meghan, Spotify is gearing up for a billion users by 2030.


 


Major technology companies faced challenges during the COVID-19 pandemic, with inflation and rising interest rates prompting significant job losses despite earlier hiring frenzies.


 


Ek emphasized the need for a deliberate repositioning, signaling changes in how the company operates. Further details about these changes will be revealed in the coming days and weeks.


 


Edited by: Marina Ramzy Mourid


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Tags: #Business #Spotify #Layoffs



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