Spotify announced on Monday plans to cut approximately 1,500 jobs, constituting 17% of its workforce, as part of cost-cutting measures following earlier layoffs in January and June.
The move led to an 11% surge in its U.S.-listed shares, reaching a two-year high of $200.46.
This downsizing trend echoes similar actions by tech giants like Amazon and LinkedIn.
In a letter to staff, CEO Daniel Ek explained the earlier hiring surge in 2020-2021 was influenced by lower capital costs, resulting in increased output tied to additional resources.
The layoffs will incur charges of 130-145 million euros in Q4, with most cash components recorded in the first and second fiscal quarters of 2024.
Consequently, Spotify anticipates a Q4 operating loss of 93-108 million euros, contrasting with the previous forecast of a 37 million euros operating profit.
Despite significant investments in its podcast business and celebrity partnerships, including Kim Kardashian, Prince Harry, and Meghan Markle, Spotify aims to reach a billion users by 2030.
