Spotify Cuts 600 Jobs as Streaming Giant Resets Costs

Spotify is cutting about 600 jobs starting today, ending a period of fast growth for the audio giant. The company confirmed it will reduce its staff by 6% this morning, joining a long list of companies shrinking their teams to save money. The news was first reported by EDM.com.

Key Facts

• Impact: 600 employees (6% of total staff) are losing their jobs.
• Severance: The company is offering 5 months of pay on average.
• Leadership: Content chief Dawn Ostroff is leaving the company as part of the shake-up.
• Source: EDM.com, Al Jazeera

Why This Is Happening

CEO Daniel Ek sent a note to the staff explaining the cuts. He said the company spent too much money too quickly. In 2022, Spotify’s costs grew twice as fast as its sales. Ek took the blame for the mistake. He admitted he was “too ambitious” in spending money before the company had earned it. The goal now is to fix the budget and make the business run leaner.

The Severance Package

Workers losing their jobs will get a safety net. Spotify is giving them an average of five months of pay. The company will also pay for their healthcare during that time. For employees on visas, the company promised immigration support. Everyone affected will get two months of help finding new jobs.

Changes at the Top

The cuts are not just affecting regular workers. Dawn Ostroff, the executive who helped build Spotify’s massive podcast business, is stepping down. The company is also moving its engineering and product teams under new leadership to speed up decision-making. Investors seemed to like the plan, as the stock price rose slightly after the news broke.