Spotify Layoffs 2026: 1,500 Jobs Slashed in CEO’s Cost-Cutting Push

Spotify has announced that it will be laying off about 1,500 workers, or about 17% of its worldwide workforce. As part of his efforts to reduce expenses and streamline operations, CEO Daniel Ek has announced layoffs. It should be noted that the company's recent financial performance has improved.

Ek informed employees in an internal memo that the reorganisation was essential for the company to become "more efficient" and in line with its long-term goals. According to media reports, this is one of the biggest layoffs at Spotify ever, and it falls squarely within the broader wave of cutbacks in the tech sector.

Reasons for the Spotify’s Layoffs

Ek mentioned aggressive hiring in 2020 and 2021 as a result of the rapid expansion across product, content, and support operations that was supported by abundant cash and low loan rates. As a result of too many responsibilities being disconnected from critical areas of influence, an internal investigation later discovered that some aspects of the company had grown too complex.

The statement follows the Swedish streaming company's strong third-quarter results, which were announced a few weeks ago. The company's operational profit margin improved, while revenue increased 11% year-on-year to €3.4 billion, which was higher than market estimates. Operating expenses remained higher than target, according to management. Ek said the leadership chose a more forceful reset than smaller, incremental reductions over two years. The reorganisation is part of Spotify's larger strategy to fortify its position in the music streaming, podcasting, and developing audio format markets. This reorganisation is done by shifting focus to creators, listeners, and product development.

What Impacted Employees will Get?

Staff members who will be impacted by the layoffs will be informed about them during meetings with HR. Severance compensations are determined by the length of service of the departing employee. Moreover, they can expect to earn remuneration equivalent to about five months' pay. Additionally, the corporation will cover healthcare costs throughout the severance period, pay for unused leave, assist with immigration matters if needed, and give outplacement services.

Even inside its podcasting division, Spotify had already cut staff earlier this year. The most recent action indicates a more thorough adjustment of the company's cost structure, notwithstanding an improvement in top-line growth. In an effort to safeguard profits and reassure investors, tech businesses that overexpanded during the digital boom of the eighties are now reducing their workforces. The focus has shifted from short-term profits to long-term operational rigour, as seen by Spotify's choice. In the increasingly competitive global streaming industry, Ek now has the issue of balancing fewer operations with continuous innovation.