Spotify announced that it will be cutting 17% of its employees worldwide in an effort to reduce expenses and prioritize profitability. This is the company’s third round of layoffs in 2021.

On Monday, the CEO of the company, Daniel Ek, announced in a blog post to employees that there will be job cuts due to a “strategic reorientation.” The exact number of employees affected was not stated in the post, but a representative confirmed that it will be approximately 1,500 individuals.

According to a blog post, Spotify utilized inexpensive funding to grow their company and made significant investments in their employees, content, and marketing during 2020 and 2021.

However, Ek mentioned that the company was taken by surprise when central banks began raising interest rates last year, which can impede economic expansion. He stated that both factors are currently presenting a difficulty.

“We are currently in a vastly different situation. Despite our attempts to decrease expenses over the past year, our cost structure is still too large for our desired goal,” stated the speaker.

Ek stated that the company’s “streamlined organization” will guarantee “Spotify’s ongoing financial success.”

During the nine months ending in September, the music streaming company Spotify, headquartered in Stockholm, reported a net loss of 462 million euros, equivalent to approximately $500 million.

In January, the company revealed plans to reduce their workforce by 6%. In June, they further downsized by 2%, laying off approximately 200 employees, mainly in their podcast department.

Major technology corporations such as Amazon, Google, Microsoft, Meta, and IBM have revealed plans to eliminate hundreds of thousands of positions in 2021.

Source: wral.com