Spotify CEO Explains Why 1500 People Were Laid Off In December 2023: Know More

Last Updated: December 12, 2023, 08:30 IST

Daniel Ek has been quoted sharing a memo explaining the layoffs

Spotify announced a major layoffs recently which felt out of turn based on its results but Ek has finally shared the reasons.

Spotify continues to churn out high subscriber numbers in the market which gives it a clear lead over Apple Music and other services. However, the streaming giant decided to lay off more than 1,000 employees recently, and nobody got the reasons for this decision.

Generally, companies decide to remain silent when they lay off employees but Spotify CEO has done the right thing by highlighting the reason for 1500 Spotify employees losing their job this month.

According to a report by Business Insider, Spotify CEO Daniel Ek has sent a memo to the existing workforce and talked about their recent decisions. “By most metrics, we were more productive but less efficient. We need to be both. While we have done some work to mitigate this challenge and become more efficient in 2023, we still have a ways to go before we are both productive and efficient,” Ek said in the memo.

Ek believes that most of the people at Spotify are working hard but their focus isn’t delivering the results that can help the company grow and become bigger. “Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact, ” the memo from Ek reportedly adds.

He also pointed out that the company now wants its employees to focus on two core targets – creators and consumers. Spotify faces a tough fight to rival Apple Music and YouTube Music among others. The platform has been planning for the Hi-Fi tier plan for a while but in that time we have seen Apple Music offer lossless music without any added cost. Companies have a right to consolidate their finances to sustain the business and Spotify is looking to compete with efficiency in place.

Only time will tell if that strategy works but the latest layoffs mean the company is trying to control its expenses and look to grow its paid subscriber base in countries like India, where it is reducing the benefits you get with the free Spotify plan that has ads.

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