Spotify Plans Workforce Reduction of Nearly 20% Despite Reporting £55 Million Profit

Spotify is set to lay off nearly 20% of its staff despite a £55 million profit. Despite subscription growth, 1,500 employees are expected to be let go, marking the third set of layoffs this year.

The cuts represent 17% of Spotify's 9,300-strong workforce. The previous layoffs included 200 in June and 600 in January. The impact on UK-based roles is uncertain, with about 150 of 881 UK employees potentially at risk.

The streamlining follows a profitable quarter for Spotify, the company's first in a year, after increasing prices and expanding its user base to 601 million, a substantial rise from the end of 2020.

CEO Daniel Ek acknowledged the contradictory nature of the job reductions given recent successes.

He articulated the company's need to balance productivity with efficiency and to reduce operational costs to meet financial goals.

Ek indicated that the cuts are part of a plan for a stronger Spotify in 2024.

Affected employees will be notified, receiving approximately five months' severance and immigration support if needed, due to visa reliance on their job.

Spotify has invested heavily in its podcast segment, attracting big names and aims for 1 billion users by 2030.