Chief executive Daniel Ek said “substantial action to rightsize our costs” was needed for the Sweden-based company to meet its objectives.

“I recognise this will impact a number of individuals who have made valuable contributions”, Ek said. “To be blunt, many smart, talented and hard-working people will be departing us.”

In its latest results, Spotify reported a profit of €65 million for the three months to September – its first quarterly profit for more than a year – buoyed by price rises and higher subscriber numbers. The company has been expanding globally as it seeks to reach a billion users by 2030. It currently has around 601 million, up from 345 million at the end of 2020.

In a statement Ek said: “The decision to reduce our team size is a hard but crucial step towards forging a stronger, more efficient Spotify for the future. But it also highlights that we need to change how we work. In Spotify’s early days, our success was hard won. We had limited resources and had to make the most of every asset. Our ingenuity and creativity were what set us apart. As we’ve grown, we’ve moved too far away from this core principle of resourcefulness.”

“The Spotify of tomorrow must be defined by being relentlessly resourceful in the ways we operate, innovate, and tackle problems. This kind of resourcefulness transcends the basic definition – it’s about preparing for our next phase, where being lean is not just an option but a necessity.”

“Embracing this leaner structure will also allow us to invest our profits more strategically back into the business. With a more targeted approach, every investment and initiative becomes more impactful, offering greater opportunities for success. This is not a step back; it’s a strategic reorientation. We’re still committed to investing and making bold bets, but now, with a more focused approach, ensuring Spotify’s continued profitability and ability to innovate. Lean doesn’t mean small ambitions; it means smarter, more impactful paths to achieve them.”

“Today is a difficult but important day for the company. To be very clear, my commitment to our mission and belief in our ability to achieve it has never been stronger. I hope you will join me on Wednesday for Unplugged to discuss how we move forward together. A reduction of this size will make it necessary to change the way we work, and we will share much more about what this will mean in the days and weeks ahead. Just as 2023 marked a new chapter for us, so will 2024 as we build an even stronger Spotify.”