Amid a raft of return-to-office mandates from tech giants, including Amazon and iPhone challenger Nothing, Spotify sees no need to treat its staff like “children” and end its popular work-from-home policy.
Spotify went through an overhaul in 2023, laying off 17% of its staff in December in a move CEO Daniel Ek acknowledged had a larger impact on operations than the company had anticipated.
The decision helped more than double Spotify’s market value in 2024, as the group notched record quarterly revenues while cutting costs. However, inside Spotify, the layoffs have shaken morale.
For those who survived the cull, there isn’t likely to be a further morale-sapping plan to break with Spotify’s popular “work from anywhere” policy.
“You can’t spend a lot of time hiring grownups and then treat them like children,” Spotify’s chief human resources officer Katarina Berg told Raconteur, explaining the group’s continued flexible work location policy.
“We are a business that’s been digital from birth, so why shouldn’t we give our people flexibility and freedom?
“Work is not a place you come to, it’s something you do.”
In February 2021, Spotify joined several other tech groups in allowing its employees to “work from anywhere.” This enabled employees to choose where and how they worked, provided the company had an office in that jurisdiction.
Unlike other companies that have trickled employees back in on a hybrid basis, like Meta, or gone all out and demanded a full return to the office, like Amazon, Spotify hasn’t chosen to renege on this policy.
A big reason is likely the effect it has had on retention. Spotify said attrition rates were 15% lower in the second quarter of 2022 compared with the same period in 2019. The company also said it had improved the diversity of its talent.
While Spotify doesn’t intend to scrap its remote-working policy anytime soon, Berg acknowledged it wasn’t an ideal setup.
“It is harder, and we all struggle to collaborate in a virtual environment,” Berg said. “But does that mean that we will start forcing people to come into the office as soon as there is a trend for it? No.”
The company is still using innovative ways to encourage its music-loving staff to come into the office, including hosting “listening lounge” sessions featuring pop stars including Olivia Dean and Rag ’n’ Bone Man. Staff are also strongly encouraged to come into the office during Spotify’s “core week” to reconnect and discuss strategy.
Spotify’s biggest-ever round of layoffs in December 2023, when it said goodbye to 1,500 staff, came as CEO Ek said the company was doing too much “work around the work.”
The impact of those layoffs on operations was bigger than Ek expected, with Berg explaining to Raconteur that remaining staffers were left in a “state of shock” by the cull.
“Spotify had been in hypergrowth, and this was the only thing people knew,” she said. “A lot of people at Spotify had never seen a recession, and it was a lot to absorb and digest.”
Editor’s note: A version of this article first appeared on Fortune.com on Oct. 8, 2024.
