Spotify to cut almost a fifth of staff

Spotify will axe almost a fifth of its workforce after warning that economic growth had slowed dramatically and it needed to cut costs as the music streaming giant seeks to turn subscriber growth into consistent profitability.

In a memo to staff on Monday, chief executive Daniel Ek said Spotify would cut about 17 per cent of its global workforce, about 1,500 people. Spotify employs more than 9,000 people worldwide.

“I recognise this will impact a number of individuals who have made valuable contributions,” Ek said. “To be blunt, many smart, talented and hard-working people will be departing us.”

Spotify shares jumped 8 per cent in morning trade in New York.

Despite its popularity, Spotify has throughout its history struggled to make a consistent profit — a source of increasing frustration from investors. Activist investor ValueAct in February acquired a stake in Spotify and raised concerns that its expenses had “exploded”.

Combined with earlier rounds of cuts, Spotify has in 2023 fired more than 2,000 employees, or a quarter of its workforce, while its user growth has soared.