Spotify trims 1,600 jobs due to escalating expenses.

In the latest tech industry layoffs, music streaming service cuts 17% of its workforce.

Spotify is reducing its workforce by nearly 1,600 positions, citing a decelerating economy and increased borrowing expenses as the primary factors in the latest wave of job cuts across major tech companies. Daniel Ek, the billionaire founder and CEO of Spotify, announced that the company has opted to trim 17% of its employees, marking the third and most significant round of layoffs in 2023.

In a message posted on Spotify’s website on Monday, Ek informed employees that if they were impacted by the layoffs, they could expect to receive a calendar invitation for a one-on-one conversation with HR within the next two hours.

In 2023, major tech corporations such as Meta, Microsoft, Amazon, and Alphabet implemented substantial layoffs and large-scale workforce reductions. This trend followed an increase in interest rates and a heightened investor emphasis on their capacity to reduce expenses to safeguard profits.

Headquartered in Stockholm, Spotify holds a commanding position in the worldwide music streaming arena and stands out as one of the few European entities challenging their American counterparts. However, amid the global economic slowdown, the company has scaled back on its once-aggressive investments in podcasting. Notably, this included supporting a podcast featuring Prince Harry and the Duchess of Sussex, a collaboration that concluded with apparent discord this year. Despite this shift, Spotify remains engaged in significant podcasting partnerships, such as the contentious arrangement with Joe Rogan, as well as collaborations with influencers like Emma Chamberlain and comedian Trevor Noah.

Ek mentioned that Spotify capitalized on favorable borrowing conditions in 2020 and 2021 when central banks significantly lowered interest rates in response to pandemic-induced lockdowns. However, he acknowledged that the current situation is markedly different, stating, “Despite our ongoing endeavors to trim expenses in the past year, our cost structure remains disproportionately large for our current needs.”

As of the end of the third quarter of 2023, Spotify’s employee count stood at 9,400. Earlier in the year, the company had already implemented workforce reductions of 6% in January and an additional 2% in June.