On December 4, 2023, a few days after presenting listeners with Spotify Wrapped, the streaming service announced that it would lay off 17% of its workforce – adding up to about 1500 workers globally. Although this wasn’t the first round of layoffs in 2023 (there were two more prior), this was certainly the largest and most devastating. 

Spotify CEO Daniel Ek explained the cause of these layoffs by saying, “The decision to reduce our team size is a hard but crucial step towards forging a stronger, more efficient Spotify for the future.” Spotify, however, is not alone in laying off so many employees. Other large tech companies, such as Google, Cisco, and Meta Platforms have been doing the same. 

Despite this, rival music streaming services such as Apple Music and Amazon Music do not appear to be struggling as much. This is because they have many other sources of revenue to rely on. Spotify has been trying to replicate this by introducing exclusive podcasts and audiobooks on the site. 

According to FastCompany, resourcefulness is essential for Spotify’s success. Reports indicate that a small percentage of the company’s third-quarter revenue in 2023 was profit. This is largely due to Spotify’s unreliable business model, which allows record companies to make immense profits while smaller artists face financial struggles.