"Spotify to cut 1,500 jobs in third layoff round this year, shares jump", 4 December 2023

Music streaming giant Spotify (SPOT.N) said... that it will lay off around 1,500 employees, or 17% of its workforce, to bring down costs, after letting 600 of its staff go in January, and 200 more in June.

Its U.S.-listed shares soared about 11% to trade near their two-year high of $200.46 in early trading.

In a letter to employees, Spotify CEO Daniel Ek said the company hired more in 2020 and 2021 due to the lower cost of capital and while its output has increased, much of it was linked to having more resources.

...he said a reduction of this size will feel large given the recent positive earnings report and its performance.

"By most metrics, we were more productive but less efficient. We need to be both," Ek said.

The company will start informing affected employees on Monday. Employees will get about five months of severance pay, vacation pay, and healthcare coverage for the severance period.

"We debated making smaller reductions throughout 2024 and 2025," Ek said. "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."