Spotify cuts 200 workers from its podcast division

Spotify is axing roughly 200 roles from its podcasting division as a part of a “strategic realignment” of the vertical. The cuts have been introduced at this time, June fifth, in an organization memo revealed by Sahar Elhabashi, Spotify’s VP, head of podcast enterprise, with the determine representing round 2 % of Spotify’s complete workforce.

The corporate may even be combining Parcast and Gimlet — two high-profile podcasting studios acquired by Spotify in 2019 — right into a single Spotify Studios operation. Whereas 11 podcasts from these networks have been already axed final yr, in style productions like Stolen, The Journal, Science Vs, Heavyweight, Serial Killers, and Conspiracy Theories will proceed to be produced underneath the newly fashioned Spotify Studios title, alongside further unique programming from The Ringer. “Each studios will greenlight new reveals with an elevated give attention to always-on programming that drives robust, loyal audiences and attracts advertisers,” Elhabashi wrote.

Whereas Spotify will proceed to provide unique content material, Elhabashi’s memo makes it sound like Spotify is pondering way more significantly about the way it can capitalize on the broader podcasting ecosystem. Elhabashi says the corporate plans to develop the analytics capabilities inside Spotify for Podcasters to assist enhance viewers numbers and says the corporate is beefing up its promoting choices to “assist extra creators make significant cash.” And despite the fact that at this time’s memo is saying layoffs within the podcasting division, Elhabashi nonetheless notes that Spotify will develop its podcasting roles devoted to creator partnerships.

“We’re increasing our partnership efforts with main podcasters from throughout the globe with a tailor-made strategy optimized for every present and creator,” Elhabashi wrote. “This elementary pivot from a extra uniform proposition will permit us to help the creator group higher. Nonetheless, doing so requires adapting; over the previous few months, our senior management group has labored intently with HR to find out the optimum group for this subsequent chapter.”

At this time’s announcement follows a bigger spherical of layoffs for Spotify again in January, by which the corporate let go of 6 % of its then 9,800-strong workforce. Among the workers affected by these layoffs had come to the corporate as a part of Podsights and Chartable — two podcast measurement and analytics platforms acquired by Spotify for undisclosed sums in February 2022. Virtually one-third of union members from each Parcast and Gimlet have been additionally reduce in October final yr. That makes this the third time that Spotify has reduce its podcasting division within the final 12 months because the vertical struggles to show a revenue, regardless of reporting again in April that advert income for podcasts had grown by 20 % yr over yr.

That stated, Spotify isn’t blaming the cuts on a scarcity of curiosity in its podcast merchandise. Within the memo, the streaming big claims to be the most important podcast writer within the US, on prime of being the most-used audio podcast platform in “most corners of the world.” Spotify has actually paid for the privilege, nevertheless, having spent over $1 billion since 2019 on tech, studios, and touchdown unique offers with the likes of Joe Rogan, Kim Kardashian, and Michelle Obama — the latter of which has already departed from the platform.

After the corporate reported a internet lack of round $248 million for its first quarter this yr, Spotify vowed that its period of huge spending on podcasts is over and promised to function extra effectively this yr. It’s value noting that whereas profitability stays a priority for Spotify, progress actually isn’t — the corporate additionally reported that its platform attracts over half a billion month-to-month lively customers, a whopping 22 % enhance in comparison with final yr. Paid subscribers additionally elevated by 15 % yr over yr, now sitting at round 210 million. The streaming big nonetheless has a aim to hit 1 billion listeners by 2030, and its drive to obtain unique podcasting content material, whereas costly, should still show to be a worthwhile funding.