New Delhi, Dec 4 : Music streaming giant Spotify on Monday announced to eliminate about 17 per cent of its workforce across the company as it looks to become "both productive and efficient". Spotify founder and CEO Daniel Ek said in a note to staff that right-sizing the workforce is critical for the company to face the "challenges ahead". He cited slowing economic growth and increased capital costs as reasons for the layoffs, claiming that the company used lower-cost capital in 2020 and 2021 to invest heavily in the business. "I have made the difficult decision to reduce our total headcount by approximately 17 per cent across the company. I recognise this will impact a number of individuals who have made valuable contributions. To be blunt, many smart, talented and hard-working people will be departing us," Ek said. Spotify employs about 8,800 people, and this job cut move will impact over 1,500 employees, according to TechCrunch. Under Severance pay, the company will start with a baseline for all employees, with the average employee receiving approximately five months of severance. This will be calculated based on local notice period requirements and employee tenure. The company will continue to cover healthcare for employees during their severance period. All employees will be eligible for outplacement services for two months. "I realise that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance. We debated making smaller reductions throughout 2024 and 2025,' the CEO wrote. This is Spotify's third round of layoffs this year. In June, the company sacked 200 employees, or 2 per cent of its workforce, from its podcast division as part of a corporate reorganisation, while in January, it slashed 6 per cent of its workforce, or about 600 staffers, globally. /IANS