Spotify lays off 17% of staff in move CEO says is to reduce costs and adjust for slow growth

Spotify is laying off 17% of its employees in a move that is intended to reduce costs and adjust for slower growth, according to an email CEO Daniel Ek sent to staff Monday.

Ek told staff that Spotify is taking "substantial action to rightsize our costs" and that the company hired too many employees in 2020 and 2021 when tech companies were investing heavily in expanding

Approximately 1,500 people are expected to be fired, a person familiar with the matter told CNBC, but a Spotify spokesperson did not comment on the exact number of people impacted by the cuts. 

Shortly before 10:00 a.m. Eastern, Spotify shares rose nearly 10% following the announcement, per Google Finance. 

"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," Ek also said. 

The CEO plans on hosting a session Wednesday to discuss the future of the company. He also said the staff reduction will force the company to change how it works, which will be revealed in the coming days.

Spotify's announcement comes after several Big Tech companies such as Meta and Microsoft laid off employees over the past year. 

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