- Spotify said Monday it plans to reduce headcount by around 6%, equating to about 600 employees.
- CEO Daniel Ek said conversations between impacted workers and managers would start shortly.
Spotify on Monday announced plans to lay off around 6% of its global workforce in an effort to reduce costs and improve efficiency.
CEO Daniel Ek said in a $4 that the company had made a "difficult but necessary decision" to cut some roles. Ek said he took full responsibility for the layoffs.
"Over the next several hours, one-on-one conversations will take place with all impacted employees," Ek wrote.
Spotify said in its third-quarter earnings report that it had 9,808 full-time employees globally. Based on that figure, a workforce reduction of around 6% would equate to about 588 workers losing their jobs.
The company has been $4 on its services as it faces investor concerns about its growth prospects and ability to get to profitability. Advertising made up 13% of total revenue in 3Q, and Spotify has wanted to grow that to at least 20%.
Ek said the music-streaming service had attempted to rein in costs over the past few months but that "simply hasn't been enough."
He said he tried to "sustain the strong tailwinds from the pandemic" but was "too ambitious in investing ahead of our revenue growth."
The restructuring will help Spotify to be more efficient, control finances, and make faster decisions, he said.
A US Securities and Exchange Commission $4 on Monday said Spotify estimated the layoffs would result in around €35 million to €45 million ($38 million to $49 million) in severance-related charges.
In addition to the layoffs, Dawn Ostroff, chief content and advertising business officer, is set to leave Spotify, Ek said. Ostroff will become a senior advisor during this transition, he added. Alex Norström, who is currently chief freemium business officer, is expected to take over content, advertising, and licensing work from now on, Ek said.
Spotify's announcement comes as other major tech companies, including $4, $4, and $4, cut jobs in an effort to slash costs.