Spotify, the digital music streaming service, has announced that it’s cutting its workforce by 17% in a bid to reduce costs.

The Swedish technology giant employed just over 9,200 members of staff as of 2023, meaning that around 1,500 people will be affected by the layoff round.

In an email shared to all employees this morning, chief executive Daniel Ek explained the “difficult decision” means that “many smart, talented and hard-working people will be departing us.”

He cited slow economic growth and a too large cost structure as the main reasons behind the decision. This is despite the company gaining €3.4 billion (£2.9bn) in total revenue in Q3 2023, an 11% year-on-year increase.

“When we look back on 2022 and 2023, it has truly been impressive what we have accomplished. But, at the same time, the reality is much of this output was linked to having more resources,” Ek said. “By most metrics, we were more productive but less efficient. We need to be both.”

“The decision to reduce our team size is a hard but crucial step towards forging a stronger, more efficient Spotify for the future. But it also highlights that we need to change how we work,” he later added, suggesting that the company must become “relentlessly resourceful.”

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This is not the first layoff round Spotify has made this year.

In January, Spotify eliminated around 6% of jobs due to the “challenging economic environment.” Later, in June, 200 people were let go from the streaming service’s podcast division.

It’s also but one of many tech layoffs that have happened this year following dramatic growth in 2020 and 2021, when the pandemic led many tech companies to scale up their teams, and then the post-pandemic economic headwinds of 2022 and 2023.

In January this year, Google cut 12,000 jobs globally, Microsoft let go 10,000 of its staff, and Dell just over 6,500 employees.

A month later, in February, IBM announced a lay off of around 4,000 employees, while PayPal cut 2,000 jobs.