SPOT: Spotify Stock Adds 8% After CEO Daniel Ek Announces 17% Headcount Reduction

This week 1,500 people at Spotify will walk out with no job after the company said it’s still spending too much, even after two layoff rounds this year.

• Spotify stock SPOT gained 8% on Monday after chief executive Daniel Ek said in an internal memo the company will undergo its third layoff round for the year. The sweeping effort to get “lean” will see 17% of the company, or 1,500 people, walking out jobless this week. With this round factored in, Spotify has laid off more than 2,300 staff, or 25% in total, this year alone.
• On the other end are the shareholders who approved of that decision by buying up the stock to a session close of $194.17 a share. A thinner staff is expected to cut costs substantially, allowing for better profits next year. The Swedish music platform still hasn’t turned in a full year of profitability since listing in New York in 2018.
• Spotify shares, however, have enjoyed tremendous upside momentum. The company’s market cap has more than doubled this year, with shares adding nearly 140% for the time span January to date. Spotify posted a surprise $68.9mn third-quarter profit after raising prices earlier in the year.