Spotify axes 1500 employees

In a publicly accessible message to the team, Spotify CEO Daniel Ek has announced the company's decision to lay off 17% of the workforce, a decision that will have serious consequences for many employees. The streaming service has around 9,250 employees worldwide.

In 2020 and 2021, the company benefited from low interest rates and was able to raise new capital easily. This also allowed the company to invest in the team and expand its workforce. In the meantime, it has become much more expensive to raise new funds. The running costs are also too high to continue working economically.

The last financial reports were quite positive, which is why the move has a bad aftertaste. According to the CEO, the company has been more productive, but less efficient due to abundant (financial) resources.

He announced that the employees affected would receive interview invitations two hours after the announcement, which are to be concluded by Tuesday. The average laid-off employee will receive severance pay for five months, during which time their health insurance will remain in effect. Remaining vacation days will also be paid out. Daniel Ek emphasizes that the employees in question will be treated with the greatest possible respect.

Lastly, the CEO also detailed his vision of Spotify's future internal direction, what needs to improve and how they plan to become more effective again. This reads like a lot of wishful thinking; it remains to be seen whether the decision-makers actually have concrete implementation plans aside from the layoffs.