Spotify CEO Daniel Ek posted a statement on Monday announcing that the music streaming company would be slashing 17% of the company’s jobs, citing higher capital costs and slowing economic growth.
The layoffs come just days after the company dropped its popular end-of-year feature, which was shared widely across social media.
In October, Spotify reported its first profitable quarter in a year, with revenue hitting $3.57 billion. In January, the company cut just under 600 jobs despite adding 6 million paid subscribers and 23 million monthly active users.
Spotify has 30.5% of the music subscription market share, according to a report by MIDiA Research at the end of 2022, but that percentage has fallen in recent years.
According to the statement released by Ek, the company has a “gap between … [its] financial goal state and … current operational costs.”
From 2020 to 2021, the company took advantage of low-interest rates to invest substantially in marketing, staffing, and content and infrastructure acquisition, spending hundreds of millions on podcast advertising platforms and big names like Joe Rogan and sports and culture giant Bill Simmons’ the Ringer.
News of the layoffs sparked criticism of that strategy on Reddit, with redditors balking at eye-watering amounts Spotify has laid out on podcasts and the amount of people they’re firing.
“We don’t pay the artists or employees but please continue to subscribe – Spotify” one redditor commented.
Other redditors bragged about how many minutes they’d listened to and how good a deal it meant they were getting.
“Probably my fault, I listened to over 24,000 minutes of Spotify this year. Used up too much,” wrote u/lawstandaloan on the r/news thread about the story.
“man i hit almost 60k minutes and it isn’t even my most used music app lol,” replied u/Show_Me_Your_Cubes.
“I slightly increased this year to 88k and think it’s frankly not high enough. I have a friend around 134k,” one commented.
But many more redditors were less concerned about their own usage, bemoaning the move by the company.
“Didn’t they have “record breaking” profits?” one asked.
“Not really,” pointed out another. “Spotify has consistently has difficulty making the model actually turn an ongoing net profit. They’ve been living on investment funds for like a decade.”
However, most people online pushed one meme. With the layoffs coming just days after Spotify released its massively popular year-end Wrapped, which highlights everything people listened to, users all cracked the same joke.
“This is the real Spotify wrap up,” said one user.
Others criticized the decisions, seeing how viral and popular the feature was just days ago, inundating places like Instagram.
“layoffs after @Spotify wrapped is bad vibes,” said one.
“Spotify laying all those people off the week after Wrapped dropped and right before the holidays is NASTY business and a reminder that these companies do not give a singular flying fuck about you,” said one.