“Spotify slashes 17% jobs in third 2020 layoff”

LONDON — Spotify has announced that it will be cutting 17% of its global workforce, marking the music streaming service’s third round of layoffs this year. The company aims to reduce costs and focus on profitability.

In a blog post addressed to employees, CEO Daniel Ek described the job cuts as part of a “strategic reorientation.” While the post did not specify the exact number of job losses, a spokesperson confirmed that approximately 1,500 people will be affected.

Spotify had previously used inexpensive financing to expand its business and made significant investments in employees, content, and marketing in 2020 and 2021. However, the company was impacted by the increase in interest rates by central banks.

“We now find ourselves in a very different environment. And despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big,” said Ek.

The company believes that the “leaner structure” resulting from the layoffs will ensure Spotify‘s continued profitability.

Stockholm-based Spotify reported a net loss of 462 million euros (about $500 million) for the nine months leading up to September.

This comes after the company previously announced a 6% reduction in staff in January and an additional 2% cut, mainly in its podcast division, in June.