• Spotify CEO Daniel Ek has confirmed that the music streaming platform is readying for mass layoffs.
• As much as 17 percent of staff will be laid off across various divisions of the company.
• The reason for the layoffs are the result of having, “too many people dedicated to supporting work.”

Last week Spotify released its annual Wrapped showcase for fans of the music streaming platform to see what content they most enjoyed throughout 2023. This week, however, the announcement out of the company is far less joyous, as CEO Daniel Ek confirmed that Spotify would be letting go of a sizeable chunk of its staff.

More specifically, as much as 17 percent of its workforce is being let go across multiple teams at the streaming platform.

“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,” Ek shared in a press statement.

“We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives. While I am convinced this is the right action for our company, I also understand it will be incredibly painful for our team,” he added.

The reason for the layoffs is quite simple – Spotify has too many employees, many of which were focused on the productivity side of the business over the past couple of years. While Ek acknowledges that these employees were indeed productive as intended, the company is now pivoting its focus to become more “efficient”.

“By most metrics, we were more productive but less efficient. We need to be both. While we have done some work to mitigate this challenge and become more efficient in 2023, we still have a ways to go before we are both productive and efficient. Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact. More people need to be focused on delivering for our key stakeholders – creators and consumers. In two words, we have to become relentlessly resourceful,” Ek continued.

As for those who are being let go, Spotify noted that they will receive severance pay, paid time off (PTO), healthcare benefits, immigration and career support.

For those of us who thought tech winter was well behind us, it may be making a return for the start of 2024.