Spotify to lay off 17% of employees — read the full memo CEO Daniel Ek sent to staff

Published

2 years ago

December 4, 2023

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It comes after Spotify reported a 65 million euros ($70.7 million) profit in the third quarter, citing lower spend on marketing and personnel.

Spotify raised prices of its subscription plans earlier this year and has been expanding into podcasts and audio books.

The latest round of redundancies follows successive cuts at the firm, which like other growth-oriented tech firms has been forced to cut back on costs in the last year or so due to higher interest rates and a worsening macroeconomic backdrop.

Team,

Over the last two years, we’ve put significant emphasis on building Spotify into a truly great and sustainable business – one designed to achieve our goal of being the world’s leading audio company and one that will consistently drive profitability and growth into the future. While we’ve made worthy strides, as I’ve shared many times, we still have work to do. Economic growth has slowed dramatically and capital has become more expensive. Spotify is not an exception to these realities.

This brings me to a decision that will mean a significant step change for our company. To align Spotify with our future goals and ensure we are right-sized for the challenges ahead, I have made the difficult decision to reduce our total headcount by approximately 17% across the company. I recognize this will impact a number of individuals who have made valuable contributions. To be blunt, many smart, talented and hard-working people will be departing us.

For those leaving, we’re a better company because of your dedication and hard work. Thank you for sharing your talents with us. I hope you know that your contributions have impacted more than half a billion people and millions of artists, creators, and authors around the world in profound ways.

I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance. We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives. While I am convinced this is the right action for our company, I also understand it will be incredibly painful for our team.

To understand this decision, I think it is important to assess Spotify with a clear, objective lens. In 2020 and 2021, we took advantage of the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing, and new verticals. These investments generally worked, contributing to Spotify’s increased output and the platform’s robust growth this past year. However, 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.

When we look back on 2022 and 2023, it has truly been impressive what we have accomplished. But, at the same time, the reality is much of this output was linked to having more resources. By most metrics, we were more productive but less efficient. We need to be both. While we have done some work to mitigate this challenge and become more efficient in 2023, we still have a ways to go before we are both productive and efficient. Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact. More people need to be focused on delivering for our key stakeholders – creators and consumers. In two words, we have to become relentlessly resourceful.

I know you will all be anxious to hear the next steps about how this process will work. If you are an impacted employee, you will receive a calendar invite within the next two hours from HR for a one-on-one conversation. These meetings will take place before the end of the day on Tuesday, and while Katarina will provide more detail on all of the specifics, please know the following will apply to all of these bandmates:

Severance pay: We will start with a baseline for all employees, with the average employee receiving approximately five months of severance. This will be calculated based on local notice period requirements and employee tenure.
PTO: All accrued and unused vacation will be paid out to any departing employee.
Healthcare: We will continue to cover healthcare for employees during their severance period.
Immigration support: For employees whose immigration status is connected with their employment, HRBPs are working with each impacted individual in concert with our mobility team.
Career Support: All employees will be eligible for outplacement services for two months.

For the team that will remain at Spotify, I know this decision will be difficult for many. Please know we are focused on treating our impacted colleagues with the respect and compassion they deserve.

Looking Ahead

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.

– Daniel

Technology

Amazon faces FAA probe after delivery drone snaps internet cable in Texas

Published

1 hour ago

November 26, 2025

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Amazon faces FAA probe after delivery drone snaps internet cable in Texas

Amazon’s new MK30 Prime Air drone is displayed during Amazon’s “Delivering the Future” event at the company’s BFI1 Fulfillment Center, Robotics Research and Development Hub in Sumner, Washington on Oct. 18, 2023.

Jason Redmond | AFP | Getty Images

Amazon is facing a federal probe after one of its delivery drones downed an internet cable in central Texas last week.

The probe comes as Amazon vies to expand drone deliveries to more pockets of the U.S., more than a decade after it first conceived the aerial distribution program, and faces stiffer competition from Walmart, which has also begun drone deliveries.

The incident occurred on Nov. 18 around 12:45 p.m. Central in Waco, Texas. After dropping off a package, one of Amazon’s MK30 drones was ascending out of a customer’s yard when one of its six propellers got tangled in a nearby internet cable, according to a video of the incident viewed and verified by CNBC.

The video shows the Amazon drone shearing the wire line. The drone’s motor then appeared to shut off and the aircraft landed itself, with its propellers windmilling slightly on the way down, the video shows. The drone appeared to remain in tact beyond some damage to one of its propellers.

The Federal Aviation Administration is investigating the incident, a spokesperson confirmed. The National Transportation Safety Board said the agency is aware of the incident but has not opened a probe into the matter.

Amazon confirmed the incident to CNBC, saying that after clipping the internet cable, the drone performed a “safe contingent landing,” referring to the process that allows its drones to land safely in unexpected conditions.

“There were no injuries or widespread internet service outages. We’ve paid for the cable line’s repair for the customer and have apologized for the inconvenience this caused them,” an Amazon spokesperson told CNBC, noting that the drone had completed its package delivery.

Amazon delivery drone snaps internet cable in Texas

The incident comes after federal investigators last month opened a separate probe into a crash involving two of Amazon’s Prime Air drones in Arizona. The two aircrafts collided with a construction crane in Tolleson, a city west of Phoenix, prompting Amazon to temporarily halt drone deliveries in the area.

For over a decade, Amazon has been working to realize founder Jeff Bezos’ vision of drones whizzing toothpaste, books and other goods to customers’ doorsteps in 30 minutes or less. The company began drone deliveries in 2022 in College Station, Texas, and Lockeford, California.

But progress has been slowed by a mix of regulatory hurdles, missed deadlines and layoffs in 2023 that coincided with broader cost-cutting efforts by Amazon CEO Andy Jassy.

The company has previously said its goal is to deliver 500 million packages by drone per year by the end of the decade.

The hexacopter-shaped MK30, the latest generation of Amazon’s Prime Air drone, is meant to be quieter, smaller and lighter than previous versions.

Amazon says the drones are equipped with a sense-and-avoid system that enables them to “detect and stay away from obstacles in the air and on the ground.” The company recommends that customers maintain “about 10 feet of open space” on their property so drones can complete deliveries

The company began drone deliveries in Waco earlier this month for customers within a certain radius of its same-day delivery site who order eligible items weighing 5 pounds or less. The drone deliveries are supposed to drop packages off in under an hour.

Amazon has brought other locations online in recent months, including Kansas City, Missouri, Pontiac, Michigan, San Antonio, Texas, and Ruskin, Florida. Amazon has also announced plans to expand drone deliveries to Richardson, Texas.

Walmart began offering drone deliveries in 2021, and currently partners with Alphabet’s Wing and venture-backed startup Zipline to make drone deliveries in a number of states, including in Texas.

WATCH: Amazon unveils satellite terminal for enterprise customers — but Starlink still dominates

Technology

CNBC Daily Open: Nvidia’s crown looks increasingly uneasy on its head

Published

2 hours ago

November 26, 2025

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CNBC Daily Open: Nvidia's crown looks increasingly uneasy on its head

Jensen Huang, chief executive officer of Nvidia Corp., during the Taiwan Semiconductor Manufacturing Co. (TSMC) sports day event in Hsinchu, Taiwan, on Saturday, Nov. 8, 2025.

Lam Yik Fei | Bloomberg | Getty Images

Uneasy lies the head that wears the crown.

Shares of artificial intelligence czar Nvidia fell 2.6% on Tuesday as signs of unrest continued rippling through its kingdom.

Over the month, Nvidia has been contending with concerns over lofty valuations and an argument from the “The Big Short” investor Michael Burry that companies may be overestimating the lifespan of Nvidia’s chips. That accounting choice inflates profits, he alleged.

The pressure intensified last week in the form of a potential challenger to the crown. Google on Nov. 18 announced the release of its new AI model Gemini 3 — so far so good, given that Nvidia isn’t in the business of designing large language models — powered by its in-house AI chips — uh–oh.

And on Monday stateside, Meta, a potential kingmaker, appeared to signal that it is considering not just leasing Google’s custom AI chips, but also using them for its own data centers. It seemed like Nvidia felt the need to address some of those rumblings.

The chipmaker said on the social media platform X that its technology is more powerful and versatile than other types of AI chips, including the so-called ASIC chips, such as Google’s TPUs. Separately, Nvidia issued a private memo to Wall Street that disputed Burry’s allegations.

Power, whether in politics or semiconductors, requires a delicate balance.

Remaining silent may shroud those in power in a cloak of untouchability, projecting confidence in their authority — but also aloofness. Deigning to address unrest can soothe uncertainty, but also, paradoxically, signal insecurity.

For now, the crown is Nvidia’s to wear — and the weight of it is, too.

What you need to know today

And finally…

Lights on in skyscrapers and commercial buildings on the skyline of the City of London, UK, on Tuesday, Nov. 18, 2025. U.K. business chiefs urged Chancellor of the Exchequer Rachel Reeves to ease energy costs and avoid raising the tax burden on corporate Britain as she prepares this year’s budget.

Bloomberg | Bloomberg | Getty Images

The UK’s Autumn Budget is coming

The run-up to this year’s U.K. Autumn Budget has been different from the norm because so many different tax proposals have been floated, flagged, leaked and retracted in the weeks and months leading up to Wednesday’s statement.

It has also made it harder to gauge what we’re actually going to get when Finance Minister Rachel Reeves finally unveils her spending and taxation plans for the year ahead.

— Holly Ellyatt

Technology

Workday stock slips on light quarterly margin guidance

Published

5 hours ago

November 25, 2025

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Workday stock slips on light quarterly margin guidance

Workday CEO Carl Eschenbach, right, walks to the morning session during the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, on July 11, 2025.

David Paul Morris | Bloomberg | Getty Images

Workday shares slid more than 5% in extended trading Tuesday after the finance and human resources software maker issued quarterly margin guidance that came in below Wall Street projections.

Here’s how the company did in comparison with LSEG consensus:

Earnings per share: $2.32 adjusted vs. $2.18 expected
Revenue: $2.43 billion vs. $2.42 billion expected

The company forecast a fourth-quarter adjusted operating margin of at least 28.5% and $2.355 billion in subscription revenue, according to a statement. The StreetAccount consensus was a 28.7% margin and $2.35 billion in subscription revenue.

Workday’s revenue grew about 13% year over year in the quarter, which ended on Oct. 31. Net income of $252 million, or 94 cents per share, was up from $193 million, or 72 cents per share, in the same quarter a year ago.

Subscription revenue in the third quarter totaled $2.24 billion, with an adjusted operating margin of 28.5%. Analysts polled by StreetAccount had anticipated $2.24 billion in subscription revenue and a 28.1% margin.

During the fiscal third quarter, Workday announced artificial intelligence agents for analyzing employee performance testing financial health, and the company revealed plans to buy AI and learning software startup Sana for $1.1 billion. Also, activist investor Elliott Management said it had built a Workday stake worth over $2 billion.

Workday has seen its stock decline this year as pundits discuss the risk of generative AI tools threatening the growth prospects for cloud software incumbents. Company shares have fallen 9% so far in 2025, while the Nasdaq Composite index has gained 19%.

WATCH: Workday CEO Carl Eschenbach: There’s a narrative that AI is eating into software, that is false