In its third round of layoffs this year, Spotify (NYSE:SPOT) has announced the elimination of 17% of its global workforce as part of a cost-cutting initiative to prioritize profitability. CEO Daniel Ek conveyed the decision in a blog post on Monday, describing the move as a “strategic reorientation.” While the post did not specify the exact number of jobs affected, a spokesperson later confirmed that approximately 1,500 employees would be impacted.

Spotify had previously leveraged inexpensive financing to expand its business, making substantial investments in employees, content, and marketing during 2020 and 2021, as highlighted in the blog post. However, Ek acknowledged that the company faced challenges when central banks began raising interest rates last year, leading to a less favorable economic environment.

In response to these challenges, Ek stated, “We now find ourselves in a very different environment. And despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big.” He emphasized that the streamlined structure resulting from the layoffs would contribute to Spotify’s sustained profitability.

For the nine months ending in September, the Stockholm-based company reported a net loss of 462 million euros (approximately $500 million). This latest round of layoffs follows earlier reductions, with a 6% staff cut announced in January and an additional 2% reduction, affecting around 200 workers primarily in the podcast division, in June.

The move by Spotify aligns with a broader trend in the tech industry, where companies like Amazon, Google, Microsoft, Meta, and IBM have also disclosed significant job cuts throughout the year.

Featured Image: Freepik @ ezphoto

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