Spotify will cut almost a fifth of its workforce as the jobs bloodbath in the tech industry continues.
The music streaming giant has said it will slash around 1,500 staff – or about 17 per cent of its employees – as it battles to cut costs.
This is the third set of lay-offs the group has announced so far this year.
Spotify chief executive Daniel Ek said he made the ‘difficult’ decision as growth slows ‘dramatically’.
The Swedish company has suffered in an era of high interest rates and the cost-of-living squeeze which has forced households to rein in spending.
Streaming sensation: Last week singer Taylor Swift was crowned the most listened to artist globally on Spotify
Spotify took advantage of cheap borrowing during the pandemic when central bankers cut interest rates in response to Covid.
But Ek said: ‘We now find ourselves in a very different environment. Economic growth has slowed dramatically and capital has become more expensive.
Spotify is not an exception to these realities.’ The update is in contrast to Spotify’s recent results.
The group posted profits of £55.7million for the three months to September – its first quarterly profit for more than a year – as it cashed in on recent price hikes for subscribers.
And even Ek acknowledged that the job cuts ‘will feel surprisingly large’ for many people because of this backdrop.
The company – which has around 9,000 staff globally and just under 1,000 in the UK – has traditionally struggled to turn a profit because of surging content costs, an advertising slowdown and intense competition.
Spotify cut about 6 per cent of its workforce in January and a further 200 podcast jobs in June. It is not alone.
Silicon Valley’s biggest names have also cut their headcount this year, with mass layoffs at Amazon, Facebook owner Meta and Google.
Dan Ives, tech analyst at wealth manager Wedbush, said: ‘Spotify needed to rip the plaster off as subscriber growth remains challenging and its big expensive bet on podcasts has been lacklustre.’
Ek has previously admitted the company made mistakes during its £1billion-plus spending spree into podcasting, which included investing heavily in Harry and Meghan’s series Archetypes.
And its music offering has continued to be its bread and butter, proving lucrative for artists too.
Last week singer Taylor Swift was crowned the most listened to artist globally on Spotify.
Estimates suggest she is set to earn over $100million in 2023 from Spotify streams alone