Spotify to Lay Off 1,500 Employees as CEO Admits Overspending
Music streaming service Spotify will lay off 17% of its workforce, according to an internal memo from CEO Daniel ECK, which amounts to roughly 1,500 people being let go. ECK said Spotify invested too heavily in 2020-2021 when capital was cheap, and has to "rightsize costs" for a new economic reality with slower growth and more expensive capital. Spotify reported a €65 million profit ($70.7 million) in the third quarter, citing lower spend on marketing and personnel. However, Ek said the cost structure is still too big given the economic challenges. Ek said Spotify needs to become more efficient and "relentlessly resourceful" in how it operates.
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00:00 Benzinga and here's what's on the block.
00:02 Music streaming service Spotify will lay off 17% of its workforce, according to an internal memo from the CEO, Daniel Ek, which amounts to roughly 1500 people that are going to be let go.
00:13 Ek said Spotify invested too heavily in 2020 and 2021 when capital was cheap and that it has to right size costs for a few economic realities with slower growth and more expensive capital.
00:24 Spotify did report $70.7 million in the third quarter, citing lower spend on marketing and personnel.
00:31 However, Daniel Ek did say that the cost structure is still too big given the economic challenges.
00:36 Ek said that the Spotify needs to go ahead and become more efficient and relentlessly resourceful in how it operates.
00:42 For all things money visit Benzinga.com
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