Spotify to cut 600 jobs after CEO admits to expanding too quickly

Music streaming service becomes latest tech firm to announce cuts after pandemic overexpansion

The music streaming service Spotify has said it is cutting about 600 jobs, as it became the latest big tech company to admit it expanded too quickly during the coronavirus pandemic.

Its co-founder and chief executive, Daniel Ek, told staff in a blogpost that the platform was reducing its workforce by 6% after he had been “too ambitious”.

“Like many other leaders, I hoped to sustain the strong tailwinds from the pandemic and believed that our broad global business and lower risk to the impact of a slowdown in ads would insulate us,” he wrote. “In hindsight, I was too ambitious in investing ahead of our revenue growth.”

Spotify’s operating expenditure grew at twice the speed of its revenue last year, Ek wrote, as the Stockholm-based company invested heavily in its podcast business. The company makes money from its premium service, which accounts for about 85% of its revenue, with the rest coming from its ad-supported service.

“Over the last few months we’ve made a considerable effort to rein in costs, but it simply hasn’t been enough,” Ek wrote.

Amazon, Microsoft, Facebook parent Meta, Google’s owner, Alphabet, and the business software company Salesforce have all announced significant job cuts recently, citing an uncertain economic environment and overexpansion under Covid restrictions when there was a boom in demand for tech-related products and services.

Spotify has 456 million monthly users. Last year the No 1 most streamed artist on the platform globally was Bad Bunny, followed by Taylor Swift, Drake, The Weeknd and BTS.

Ek told staff that Dawn Ostroff, the head of content and advertising, was leaving after more than four years at the company. Ostroff helped shape Spotify’s podcast business and guided it through backlash around Joe Rogan’s show for interviewing guests who shared Covid-19 conspiracy theories.


Dan Milmo Global technology editor

The GuardianTramp

Related Content

Article image
Shaken it off! Taylor Swift ends Spotify spat
Singer ends three-year boycott of streaming service over royalties and makes entire back catalogue available to celebrate 10m sales of 1989 album

Mark Sweney

09, Jun, 2017 @4:21 PM

Article image
Spotify revenues surge 80% to more than £1.5bn
Music streaming service nevertheless recorded widening losses in 2015 due to heavy investment and fiercer competition

Julia Kollewe

24, May, 2016 @4:05 PM

Article image
Good results offer the tech giants a chance to change the subject
After a torrid period for Silicon Valley’s reputation, strong financial news may help improve investors’ mood

Rob Davies

22, Jul, 2018 @6:00 AM

Article image
The trillion-dollar question: can the tech giants keep growing?
A startling stock-market landmark for Apple has been offset by big falls for Facebook and Twitter. Is this tumultuous period just a blip, or the first sign of trouble?

Nick Fletcher, Rob Davies and Alex Hern

04, Aug, 2018 @3:00 PM

Article image
UK watchdog to study music streaming amid claims of raw deal for artists and fans
Competition regulator acts after stinging criticism by MPs of record labels and platforms such as Spotify

Mark Sweney

27, Jan, 2022 @8:52 AM

Article image
Is Spotify really worth $20bn?
Music service will soon have its IPO and investors think it can be as big as Netflix. Are they right?

Alex Hern

02, Mar, 2018 @3:53 PM

Article image
Spotify expected to report subscriber slowdown
Such an update would be another signal that Covid lockdown entertainment boom is over

Mark Sweney

25, Apr, 2021 @2:44 PM

Article image
Spotify beats expectations by reaching 83m subscribers
Music streaming service posts positive figures in face of competition from Apple and Amazon

Staff and agencies

26, Jul, 2018 @4:09 PM

Article image
Spotify buys podcast firms Gimlet and Anchor
Streaming service reports first quarterly profits as it reveals plans to broaden beyond music

Mark Sweney

06, Feb, 2019 @4:17 PM

Article image
Twitter may ‘halve its workforce’ as key investor backs job cuts
Reports suggest new owner Elon Musk aims to lose 3,800 roles of 7,500 staff with workers to be told as soon as Friday

Dan Milmo in Lisbon

03, Nov, 2022 @8:00 AM