Spotify’s shares closed over 7% higher on Monday after the music streaming giant revealed plans to lay off 17% of its workforce. The move aims to reduce costs and adapt to a deceleration in growth. In an email sent to staff, Spotify CEO Daniel Ek acknowledged that the company had taken on too many employees in recent years and now needed to downsize. A
lthough Spotify reported a €65 million ($70.7 million) profit for Q3 due to reduced spending on marketing and personnel, the layoffs are part of the company’s efforts to prioritize profitability. Analysts suggest the cost-cutting measures could lead to a nearly 2% reduction in operating expenses by 2024. This latest round of layoffs follows previous cuts implemented earlier this year. Despite the workforce reductions, Spotify’s shares have more than doubled in value in 2020.