Spotify Cutting 1.5K Workers

Facts

Music streaming platform Spotify on Monday announced it’s laying off 17% of its workforce — approximately 1.5K workers.¹
In a letter to employees posted on Spotify’s blog, CEO Daniel Ek called the cuts part of a “strategic reorientation.”²
Ek also explained that the company was too aggressive in its hiring in 2020 and 2021, so it would be taking 'substantial action to rightsize' its costs.³
These cuts come despite Spotify posting a quarterly profit for the first time in a year and a half during the quarter that ended Sept. 30. Spotify made approximately $70M in three months, with the number of monthly active users increasing by 26%.⁴
Spotify earlier this year also raised its monthly subscription rate by $1, which it says boosted premium subscription revenue by 10 percent.⁴
The cuts — which follow the company letting go of 600 staffers in January and 200 in June — sparked Spotify’s US-listed shares Monday to jump 11% in early trading.⁵

Narrative A, as provided by The New York Times. Spotify is no different than the other major tech firms — including Amazon and Meta — who have had to make cuts now that pandemic-era demand has died down. Investors know there was too much redundancy in Spotify's staffing, and now the platform has shown it's serious about consistently making a significant profit after years of focusing on just user totals.
Narrative B, as provided by Daily Mail. Spotify has been mismanaged for years. While barely compensating the artists it relies on for content, it spent way too much on high-profile podcasts — a decision that cost Spotify financially and also courted controversy. All the while it's barely eked out a profit and now it's had its third staff cut of the year.