Spotify Spreads Holiday Jeer By Plotting Big Round Of Layoffs Ahead Of Christmas
While Spotify fills everyone’s Twitter/X timeline with users posting their most played songs of 2023, the company announced it will be laying off 1,500 workers ahead of Christmas. The number equates to a not-insignificant 17% of Spotify’s total workforce, and follows layoffs of 600 employees in January, plus an additional 200 in June of this year.
In an open letter to employees today, Spotify CEO Daniel Ek announced to the employees that there would be upcoming organizational changes that would affect all of them. While Ek pointed out that the company had made “worthy strides” over the last couple of years, there was still more work to do. However, that work will have to be done with fewer workers on the payroll.
Ek explained, “This brings me to a decision that will mean a significant step change for our company. To align Spotify with our future goals and ensure we are right-sized for the challenges ahead, I have made the difficult decision to reduce our total headcount by approximately 17% across the company.” He went on to add, “I recognize this will impact a number of individuals who have made valuable contributions. To be blunt, many smart, talented and hard-working people will be departing us.”
The words Ek shared echo the same sentiments many in the tech industry have been hearing as of late. Companies, such as Intel and Epic Games, have had to rein in spending in a slower market. Even so, for those affected by Spotify's layoffs just ahead of Christmas, the timing may leave them envisioning the company as being run by Scrooge McSpotify.
The impacted employees, who will all find out today who they are, will be given a few parting gifts to help them through the uncertain times ahead. Each will receive a severance package that includes approximately five months of pay (based on tenure), all accrued and unused vacation paid out, and continued healthcare coverage during the severance period. For employees whose immigration status is connected to their employment, they will work with the company’s mobility team to figure out their situation. All employees laid off will also be privy to two months of outplacement services provided by Spotify.
Spotify’s CEO ended his open letter by looking forward. He remarked that while the decision to reduce the overall team size was difficult, it was necessary to become stronger and more efficient. Ek added that it also “highlights that we need to change how we work.” The employees who survive the cuts will face hard times ahead, as they will be expected to continue producing on the levels previously attained with a larger workforce. As Ek explained, “Lean doesn’t mean small ambitions; it means smarter, more impactful paths to achieve them.”
The remaining employees at Spotify will join Ek on December 6, 2023, for the company’s Unplugged session to discuss how they will move forward. Ek closed his letter by remarking, “A reduction of this size will make it necessary to change how we work, and we will share much more about what this will mean in the days and weeks ahead. Just as 2023 marked a new chapter for us, so will 2024 as we build an even stronger Spotify.”