Spotify Lays Off 17 Percent Of Employees Due To Capital Problems

JAKARTA Spotify is taking a big step towards the end of the year. Co-Founder and CEOSpotifyDaniel Ek announced that 17 percent of employees in his company had been laid off.

Ek said that this dismissal had to be done due to slowing economic growth and more expensive capital. Ek admits that this decision is very difficult, but needs to be done for Spotify's future.

"I realize this will have an impact on a number of individuals who have contributed valuablely. Frankly, there are many intelligent, talented, and hard workers who will leave us," said Ek, quoted by VOI from an official release.

Some may question this decision because Spotify's revenue is fine and Ek is aware of it. Ek said that their earnings report was positive, but operational costs for the next two years would be quite large.

"Given the gap between our financial goals and our current operational costs, I decided that substantial action to adjust costs is the best choice to achieve our goals," explains Ek.

Spotify will continue to provide the rights of affected employees such as severance pay, Paid Time Off (PTO), health services, immigration support, and career support. All rights of these employees will be adjusted to each individual.

Meanwhile, Engadget reported that Spotify has around 9,000 employees at this time. This layoff (PHK) caused 1,500 employees to lose their jobs.

Last month, Spotify also announced that it was changing royalties models by providing a larger cut burden to artists and charging fees to labels or agencies if fake streaming is found.

The company continues to strive to generate more profits. However, it is not known whether this policy change is related to Spotify's obstacles in seeking capital or not.