Spotify Layoffs Encompass 6% of Workforce — Here’s Daniel Ek’s Letter

Spotify lay offs

Photo Credit: Reet Talreja

Spotify plans to lay off around 6% of its workforce, adding to other massive layoffs in the tech industry.

Spotify grew immensely over the course of the pandemic, attracting 456 million monthly active listeners. Now CEO Daniel Ek says the company needs to make changes. “In hindsight, I was too ambitious in investing ahead of our revenue growth. And for this reason, today, we are reducing our employee base by about 6% across the company,” Ek told employees. “I take full accountability for the moves that got us here today.”

Also accompanying these changes is a broad reorganization strategy for Spotify at the top. “While we have made great progress in improving speed in the last few years, we haven’t focused as much on improving efficiency,” Ek writes.

“We still spend far too much time syncing on slightly different strategies, which slows us down. And in a challenging economic environment, efficiency takes on greater importance. So, in an effort to drive more efficiency, control costs, and speed up decision-making, I have decided to restructure our organization.”

“To start, we are fundamentally changing how we operate at the top. To do this, I will be centralizing the majority of our engineering and product work under Gustav as Chief Product Officer and the business areas under Alex as Chief Business Officer. I’m happy to say that Gustav and Alex, who have been with Spotify for a long time and have done great work, will be leading these teams as co-presidents, effectively helping me run the company day-to-day.”

“As part of this change, Dawn Ostroff has decided to depart Spotify. Dawn has made a tremendous mark not only on Spotify but on the audio industry overall,” Ek continues. Dawn was instrumental in helping get Spotify’s podcasting strategy up and running—but it remains unclear if that strategy will pay off. In the meantime, Ostroff will assume the role of senior advisor to facilitate her transition.

To those employees impacted by the layoffs, Spotify is offering a severance package that includes all accrued and unused vacation and continued healthcare during the severance period.