Music streaming firm Spotify announced Monday that it is laying off 17% of its workforce, equal to around 1,500 of its employees, according to Anadolu Agency.
"Economic growth has slowed dramatically and capital has become more expensive," CEO Daniel Ek said in a statement. "I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance."
Spotify saw its revenue climb up to almost €3.36 billion ($3.64 billion) in the third quarter of 2023, up 10.5% from approximately €3.04 billion in the same period of last year, according to its latest financial results statement.
Net income attributable to owners came in at €65 million during that period, which was a strong recovery from the €166 million loss in the third quarter of last year.
"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," Ek said.
Spotify in January decided to reduce its workforce by 6%, or 600 workers, which was followed in June with an additional 2% reduction, or approximately 200 employees.
Dozens of companies in the technology sector have been cutting jobs as they struggle with lower income and falling advertisement revenue.
Uber, Reddit, Disney, 3M, Amazon, Yahoo, Affirm, Zoom, Dell, IBM, Microsoft, Salesforce, PayPal, and Google's parent company, Alphabet, have laid off workers by thousands since the last quarter of the past year.
