CEO of Spotify, Daniel Ek, revealed today that the company is letting go of over 1,000 workers, or 17 percent of the workforce. Spotify must reduce expenses to close the gap between its current operational costs and desired financial state.
Ek claims that in 2020 and 2021, Spotify hired too many people, which raised operating costs and decreased efficiency even though it increased output and the company’s growth. Employees will receive an average of five months of severance pay, with the amount determined by tenure and local notice period requirements.
Spotify made $3.6 billion in the third quarter of 2023, up from $3.2 billion in the same time in 2022. In 2023, Spotify achieved its first profitable quarter with the addition of six million paid subscribers and 23 million monthly active users. But profit was a meager one percent.
The primary rival of Apple Music is Spotify, which has long objected to the fees that Apple charges through the App Store. This year, Daniel Ek has been pushing UK lawmakers to pass a bill to control the digital market’s competition and forbid Apple from providing a platform while simultaneously engaging in competition.
The most recent disagreement between Apple and Spotify occurred in late 2022 when Apple rejected an update to the Spotify app that included audiobook support.
