Spotify is planning to lay off approximately 1,500 employees in order to cut costs. This will be the third round of job cuts for the company this year. CEO Daniel Ek stated that the decision was made due to economic slowdown and increased capital expenses. The goal of these changes is to make the company more efficient and return to its startup roots. Despite gaining millions of subscribers, Spotify has struggled to consistently generate profit. Ek mentioned that they had considered smaller job cuts in the future but decided that a substantial action was necessary to achieve their objectives. Impacted staff will have one-on-one meetings before Tuesday and will receive around five months of severance pay on average. In January, Spotify had already laid off over 500 employees, and in June, 200 employees from its podcasting unit were let go. Many tech companies, including Microsoft and Amazon, have also reduced their workforce due to economic factors such as inflation and rising interest rates. Ek acknowledged that while Spotify has experienced growth, it has become less efficient and shifted away from its resourceful startup mindset. He emphasized the need to focus on delivering for content creators and consumers and expressed the company's determination to become productive and efficient. Ek described the layoffs as a strategic reorientation rather than a step back and mentioned that more information about the changes will be shared in the coming weeks.
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