Music streaming app Spotify plans to lay off 1,500 workers, the company announced Monday.

The staff reduction represents 17% of its global workforce and is the third layoff of the year as the Swedish firm works to improve profitability.

What You Need To Know

  • Spotify plans to lay off 1,500 employees, the company announced Monday

  • It is the third staff cut for the company this year as it seeks to become profitable

  • Spotify currently has about 220 million paying subscribers

  • U.S. subscription prices increased over the summer

“The Spotify of tomorrow must be defined by being relentlessly resourceful in the ways we operate, innovate and tackle problems,” Chief Executive Daniel Ek said in an internal memo to staff that was also posted on the Spotify website. “Being lean is not just an option but a necessity.”

Since 2020, Spotify’s staff almost doubled to more than 8,000 as the company sought to capitalize on increased usership during the pandemic. It currently has about 220 million paying subscribers.

The most recent round of layoffs follows a cut of 600 employees, or 6% of its staff, in January, and a cut of 200 employees, or 2% of its workers, in June, many of them in Spotify’s podcasting division. Over the summer, Spotify trimmed its podcast offerings to cut costs, including Megan Markle’s “Archetypes.”

In July, Spotify increased its U.S. subscription prices from $9.99 monthly to $10.99 for a premium individual plan and from $12.99 to $14.99 for premium duo. Still, the company expects to post an operating loss of 93-108 million Euros in the fourth quarter. Ek said he plans for the company to be profitable in 2024 and to generate $100 billion in revenue by 2030.

In his note to employees, Ek said, “To be blunt, many smart, talented and hard-working people will be departing us.” Laid off employees will receive an average of five months’ severance pay.