Spotify, the popular music streaming platform, has announced its plans to restructure its podcast division, leading to a reduction in its workforce by cutting approximately 200 jobs. This accounts for roughly 2 per cent of Spotify’s global employee base. The decision comes just five months after the company laid off 600 employees due to macroeconomic conditions.
Sahar Elhabashi, the Vice President and Head of Spotify’s podcast business, stated in a blog post that despite the restructuring, podcast listenership continues to grow, and the company maintains a stable position in the market. He acknowledged the challenges associated with the news, saying, “News like this is never easy.” However, she assured that impacted employees would be treated with empathy and respect throughout the process. The affected employees have already begun receiving invitations for individual conversations with the HR department. The blog post also emphasized that Spotify would provide generous severance packages, including extended healthcare coverage and immediate access to outplacement support, to assist the impacted individuals.
Over the past decade, podcasts have gained immense popularity across various platforms, with numerous creators establishing dedicated series in genres such as health, technology, and true crime. Recognizing this trend, Spotify made significant investments in the podcasting industry, signing high-profile exclusive deals worth over $1 billion with creators like The Joe Rogan Experience, Kim Kardashian, and Michelle Obama. Concurrently, other companies, such as Amazon, expanded their podcast offerings through apps like Audible.
Despite its previous investments, Spotify remains focused on new podcast series. As part of the restructuring, the company will merge Parcast and Gimlet, two prominent podcasting studios it acquired in 2019, into a renewed Spotify Studios operation. This move aims to produce original content, including popular shows like Stolen, The Journal, Science Vs, Heavyweight, Serial Killers, and Conspiracy Theories. The Ringer, another content company acquired by Spotify, will continue building its programming lineup covering sports, culture, and tech. Additionally, both studios will greenlight new shows with an increased emphasis on always-on programming to cultivate strong, loyal audiences and attract advertisers.
Spotify plans to introduce “more business models” to help creators monetize their work effectively. Creators will receive analytics tools within Spotify for Podcasters, enabling them to boost audience numbers and engagement. Despite the recent job cuts in the podcasting division, Spotify reported increased ad revenue for podcasts in April. However, it fell short of the company’s initial estimates.
As of September 30 last year, Spotify had 9,800 full-time employees. The company had already announced a hiring freeze for the rest of 2022 and into 2023. Following the latest round of layoffs, Spotify aims to navigate the podcasting industry’s evolving landscape while ensuring a sustainable and profitable business model for both creators and the company itself.