Spotify will cut roughly 17 per cent of its global workforce, impacting around 1,500 employees, as chief executive Daniel Ek moves to streamline operations and tighten costs despite improving financial performance.
In an internal note to staff, Ek described the restructuring as necessary to make the organisation “more efficient” and better aligned with long-term priorities. The move marks one of the largest job reductions in Spotify’s history, placing it firmly within the wider wave of technology sector layoffs, as per media reports.
The announcement comes weeks after the Swedish streaming group reported solid third-quarter results. Revenue rose 11 per cent year-on-year to €3.4 billion, exceeding market expectations, while margins improved and the company returned to operating profitability.
Yet management concluded that operating expenses remained above target. Rather than pursuing smaller, phased reductions over two years, leadership opted for what Ek characterised as a more decisive reset.
Ek pointed to aggressive hiring during 2020 and 2021, when low interest rates and abundant capital encouraged rapid expansion across product, content and support functions. A subsequent internal review found that parts of the business had become overly layered, with too many roles removed from core impact areas.
The restructuring aims to redirect resources toward creators, listeners and product development, as Spotify seeks to strengthen its competitive position in music streaming, podcasts and emerging audio formats.
Employees affected by the cuts will be notified through meetings with human resources. Departing staff are expected to receive severance packages based on tenure, with average compensation estimated at around five months’ salary. The company will also provide payment for unused leave, healthcare coverage during the severance period, immigration support where required and outplacement services.
Spotify had already reduced headcount earlier this year, including within its podcasting division. The latest move signals a deeper recalibration of the company’s cost base, even as top-line growth improves.
Across the technology sector, companies that expanded aggressively during the pandemic-era digital boom are now trimming workforces to protect margins and reassure investors. Spotify’s decision underscores that profitability alone is no longer sufficient; sustained operational discipline has become the priority.
For Ek, the challenge now will be balancing leaner operations with continued innovation in an increasingly competitive global streaming market.