Spotify is laying off 17 percent of its employees in an attempt to cut costs, its CEO Daniel Ek announced to staff today. Based on its total headcount of 9,241 revealed during its last earnings release, the cuts are expected to impact over 1,500 people.

In a memo sent to staff, Ek said slowing economic growth and rising costs were to blame for the cuts, which he said would make Spotify a leaner company. “Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact,” Ek wrote. “As we’ve grown, we’ve moved too far away from this core principle of resourcefulness,” he later added.

This is Spotify’s third major round of layoffs conducted this year. In January the company announced it would be laying off 6 percent of staff, or roughly 600 employees. Then, in June, it announced it would be cutting a further 200 roles from its podcast division. As well as cutting costs, Spotify has also made moves to increase revenue, raising prices of several of its plans across multiple markets, including the US, over the summer. 

These layoffs have come after Spotify’s headcount increased significantly during the pandemic, with its headcount nearly doubling in the past three years, The Wall Street Journal notes. In his memo, Ek defended his decision to grow the team throughout that period, but said that “we now find ourselves in a very different environment.” 

Employees impacted by Spotify’s latest layoffs will receive around five months of severance pay according to Ek’s memo, during which time the company will continue to cover their healthcare. 

Spotify has generally prioritized growth over quarterly profits throughout its history, but the WSJ notes that investors have been increasingly pushing for profitability over the past year. Ek said at an investor day last year that he intends for Spotify to be profitable by 2024. Although the company posted a quarterly profit in its last earnings release, the WSJ notes that it reported losses of €462 million (around $502 million) in the first nine months of this year.