Spotify, a music streaming giant, has announced the Swedish company’s decision to lay off 1,500 employees globally, amounting to 17% of its total workforce, citing efforts to maximise profits.

“I realise that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance,” Daniel Ek, the CEO of Spotify, said in a prepared statement.

Spotify’s latest decision to lay off workers comes after the company sacked 600 employees in January and an additional 200 in June, actions that some of the biggest companies across various industries have embarked on since last year.

According to VOA, the company recorded close to $70.3 million in quarterly net profit in October. However, due to the latest layoffs, Spotify is expected to lose between $100 million to $117 million in the fourth quarter as the company is obligated to settle with the workers.

The laid-off workers will be paid severance, which includes about five months’ pay, vacation pay, and health care coverage for the severance period—an expenditure that will constitute the majority of the charges in the fourth-quarter financial report.

“We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal … and our current operational costs, I decided that a substantial action to right-size our costs was the best option to accomplish our objectives,” Mr Ek added.

It is still unclear when the latest laying off would become beneficial for Spotify, but the company said that they would “generate meaningful operating efficiencies going forward.”