Music streaming giant Spotify revealed its decision to trim its workforce by approximately 17%, citing the need to streamline operations in response to a notable slowdown in economic growth.

Despite the positive news in October of a rare quarterly operating profit of 32 million euros, a stark contrast to the 228 million euro loss reported during the same period in the previous year, Spotify’s move to reduce staff size aims at addressing concerns amid challenging economic conditions.

ALSO READ: Transport minister commits to completion of Port Harcourt-Maiduguri rail network

The company’s chief executive, Daniel Ek, acknowledged the surprise that may accompany such a substantial reduction, especially following a recent upturn in earnings and performance.

Ek explained in a letter to employees that the company had previously taken advantage of favorable capital conditions in 2020 and 2021 to invest significantly in team expansion, content improvement, marketing, and new business areas.

However, Ek noted a shift in the business landscape, stating, “We now find ourselves in a very different environment.

And despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big.” The move is indicative of a strategic response to adapt to changing market dynamics and align the company’s expenses with its current needs.

Spotify, known for its aggressive growth strategies, has invested heavily in various initiatives since its inception, including market expansions and exclusive content, particularly in the podcasting space.

With over one billion dollars invested solely in podcasts, the company has experienced significant staff growth, ballooning from around 3,000 employees in 2017 to approximately 9,800 by the end of 2022.

ALSO READ: Music wealth is like ritual money – Shallipopi

Despite these investments and successes in the online music market, Spotify has yet to achieve a full-year net profit, occasionally reporting quarterly profits.

The decision to reduce its workforce underscores the company’s commitment to achieving a more sustainable cost structure in a dynamically changing economic environment.