As an explanation, it is stated that the company's so-called Opex, or running costs, have increased at twice the rate compared to the company's revenue growth.
Something that will be unsustainable in the longer term, according to the company itself.
“In retrospect, I can state that I was too ambitious when I invested before our revenue growth.
For this reason, we are today reducing our workforce by approximately 6% throughout the company," writes Daniel Ek.
Almost 10,000 employees
According to the latest interim report, the company had 9,800 employees and the downsizing now means costs of 35–45 million euros.
Despite tailwinds during the pandemic and, according to the company themselves, a lower risk of reduced advertising revenue, they have now encountered financial obstacles.
"I understand if, given our historical focus on growth, it can be seen as a cultural shift.
But while we develop and grow as a company, the same must apply to how we work," writes Daniel Ek.
The staff who are made redundant will be offered a severance pay equivalent to an average of five months' wages, the company states.
Many tech giants are bleeding
A long line of tech giants have recently announced major reductions in staff.
Google owner Alphabet, Amazon.com, Facebook owner Meta Platforms and software giant Microsoft have all, in the wake of reduced advertising revenue and a shaky economic outlook, issued unusually large warning notices.
SVT has applied for Spotify who declined an interview and refers to the press release.