Spotify to cut almost 20% of its workforce despite making £55m profit in latest report | Science and technology news

Popular music streaming app Spotify is to cut almost a fifth of its workforce despite making a profit of €65m. (£55.7m), according to the latest figures.

The firm’s latest round of job cuts will affect around 1,500 people – which is 17% of its current total of 9,300 employees.

It is the third round of job losses at the streaming company this year, with 200 workers let go in June and another 600 in January.

It is not clear how many roles will be affected in the UK, but 881 people are employed by Spotify in the country, suggesting around 150 jobs could be at risk.

It comes after the company made a profit in the three months to September – its first quarterly profit in a year – after raise prices and reports a growth in the number of subscribers.

Spotify currently has 601 million users, up from 345 million at the end of 2020.

But its CEO, Daniel Ek, said in a letter to employees that the company was hiring more in 2020 and 2021.

On Monday, he said the latest reduction in headcount will be felt given the recent upbeat earnings report and its results.

But he added: “By most metrics we were more productive but less efficient. We need to be both.

“We discussed making smaller reductions throughout 2024 and 2025.

“However, given the gap between our target financial condition and our current operating costs, I decided that significant action to adjust our costs was the best option to achieve our goals.”

He also said the company will “build an even stronger Spotify” in 2024 as a result of the cuts.

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The company will begin notifying affected employees on Monday, with each person receiving about five months of severance pay for the severance period.

The company will also offer immigration support to anyone whose visa is linked to their employment.

In recent years, Spotify has invested more than a billion dollars to build its podcast business, signing up celebrities such as Kim Kardashian, Prince Harry and his wife Meghan.

It ultimately hopes to reach one billion users by 2030.

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