Yesterday, Spotify announced it is reducing its global workforce by 17%. This would mean about 1500 out of 9241 employees will lose their jobs this holiday.

This will mark the third round of layoffs Spotify has implemented this year. In January, about 500 employees were let go; then in June, another 200 employees from Spotify’s podcast division were hit.

According to Spotify CEO, Daniel Ek, “economic growth has slowed dramatically and capital has become more expensive. Despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big”.

Last month, Spotify reported its Premium Subscriber base reached 226 million paying users, translating to Premium revenue of $3.16 billion at a 16% YoY increase. The company also posted quarterly profits of $34.82 million.

Daniel Ek, however, continues:

“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.”

Spotify has also implemented an immediate hiring freeze globally, removing all openings from its official jobs board.

Read Daniel Ek’s full memo to employees here.

In October, Daniel Ek sold 400,000 shares of his Spotify stock, raking in about $64 million for that transaction.