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Spotify To Cut 17% of Workforce Despite Taylor Swift Effect
December 4, 2023
Spotify will cut 17% of its workforce in a third strike against the company, despite the massive success of Taylor Swift on the streaming platform in its third quarter. This third batch of layoffs is a dramatic move for the streaming giant, aimed at reducing its costs and adjusting for a slowdown in growth.
The latest round of job cuts — which will affect around 1,500 employees — comes on the heels of layoffs in both January and June of this year. In an email sent to staff, Spotify CEO Daniel Ek said that Spotify was taking “substantial action to rightsize our costs.”
“Over the last two years, we’ve put significant emphasis on building Spotify into a truly great and sustainable business — one designed to achieve our goal of being the world’s leading audio company and one that will consistently drive profitability and growth into the future,” Ek said in the internal memo shared on Spotify’s website. “While we’ve made worthy strides, as I’ve shared many times, we still have work to do. Economic growth has slowed dramatically and capital has become more expensive. Spotify is not an exception to these realities.”
Ek continued, “This brings me to a decision that will mean a significant step change for our company. To align Spotify with our future goals and ensure we are right-sized for the challenges ahead, I have made the difficult decision to reduce our total headcount by approximately 17% across the company. I recognize this will impact a number of individuals who have made valuable contributions. To be blunt, many smart, talented, and hard-working people will be departing us.”
He concluded, “For those leaving, we’re a better company because of your dedication and hard work. Thank you for sharing your talents with us. I hope you know that your contributions have impacted more than half a billion people and millions of artists, creators, and authors around the world in profound ways.”
This third round of layoffs comes on the heels of a banner year for the streaming service. During its third quarter, Spotify profited, growing its subscribers in all regions.
Much of this success was due to Taylor Swift’s music on the platform. Spotify recently reported that Swift was the platform’s most-streamed artist of 2023. This honor will earn her more than $100 million.
Her revenue will grow further when publishing is added. Spotify reports that Swift generated 26.1 billion streams over the year, partly thanks to the releases of her 2022 album, “Midnights,” and her 2023 re-releases, “Speak Now (Taylor’s Version)” and “1989 (Taylor’s Version),” according to Deadline.
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