Spotify is laying off over 1,600 employees, blaming the latest round of layoffs at a large media enterprise on a sluggish economy and increasing financing prices.

The company's billionaire CEO, Daniel Ek, announced that it had opted to reduce 17% of its workers, the third and steepest round of layoffs in 2023.

In a note to workers published on Spotify's website on Monday, Ek said they would have the opportunity to receive a "one-on-one" conversation with HR if the layoff affected them.

Thousands of tech jobs have been eliminated in the last year as falling advertising income and recession fears trigger reevaluations of headcounts that soared during the COVID-19 pandemic.

It is worth noting that smaller tech firms like UK-based cybersecurity firm Sophos and cryptocurrency players like Coinbase have also announced job cuts affecting up to 20% of their employees.

According to data collected by the Layoffs.FYI website, more than 55,000 tech employees globally have been laid off in 2023.

Stockholm-based Spotify is the worldwide leader in music streaming and one of the few European businesses to compete with US rivals. However, since the global economy has slowed, it has reduced its former strong investment in podcasting.

In a contract that ended in apparent acrimony this year, Prince Harry and the Duchess of Sussex invested in a podcast. Spotify maintains high-value podcasting partnerships, including a contentious agreement with Joe Rogan and others with influencer Emma Chamberlain and comic Trevor Noah.

According to Ek, Spotify took advantage of cheap financing in 2020 and 2021, when central bankers dropped interest rates dramatically in reaction to coronavirus pandemic lockdowns, but "we now find ourselves in a very different environment."

He explained, “Despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big."

Employees who are laid off will get an average of five months' severance compensation plus unused holiday pay, according to Ek.

He explained that this "leaner structure" would help the company “invest our profits more strategically back into the business,” adding that “Today is a difficult but important day for the company.”