Spotify is axing approximately 200 roles from its podcasting division as part of a “strategic realignment” of the vertical. The cuts were announced today, June 5th, in a company memo published by Sahar Elhabashi, Spotify’s VP, head of podcast business, with the figure representing around 2 percent of Spotify’s total workforce.
The company will also be combining Parcast and Gimlet — two high-profile podcasting studios acquired by Spotify in 2019 — into a single Spotify Studios operation. While 11 podcasts from these networks were already axed last year, popular productions like Stolen, The Journal, Science Vs, Heavyweight, Serial Killers, and Conspiracy Theories will continue to be produced under the newly formed Spotify Studios name, alongside additional original programming from The Ringer. “Both studios will greenlight new shows with an increased focus on always-on programming that drives strong, loyal audiences and attracts advertisers,” Elhabashi wrote.
While Spotify will continue to produce original content, Elhabashi’s memo makes it sound like Spotify is thinking far more seriously about how it can capitalize on the broader podcasting ecosystem. Elhabashi says the company plans to expand the analytics capabilities within Spotify for Podcasters to help boost audience numbers and says the company is beefing up its advertising offerings to “help more creators make meaningful money.” And even though today’s memo is announcing layoffs in the podcasting division, Elhabashi still notes that Spotify will expand its podcasting roles dedicated to creator partnerships.
“We are expanding our partnership efforts with leading podcasters from across the globe with a tailored approach optimized for each show and creator,” Elhabashi wrote. “This fundamental pivot from a more uniform proposition will allow us to support the creator community better. However, doing so requires adapting; over the past few months, our senior leadership team has worked closely with HR to determine the optimal organization for this next chapter.”
Podcasting studios Parcast and Gimlet are being combined into a new Spotify Studios operation
Today’s announcement follows a larger round of layoffs for Spotify back in January, in which the company let go of 6 percent of its then 9,800-strong workforce. Some of the employees affected by those layoffs had come to the company as part of Podsights and Chartable — two podcast measurement and analytics platforms acquired by Spotify for undisclosed sums in February 2022. Almost one-third of union members from both Parcast and Gimlet were also cut in October last year. That makes this the third time that Spotify has cut its podcasting division in the last 12 months as the vertical struggles to turn a profit, despite reporting back in April that ad revenue for podcasts had grown by 20 percent year over year.
Spotify has spent over $1 billion on landing exclusive high-profile podcasting deals like The Joe Rogan Experience
That said, Spotify isn’t blaming the cuts on a lack of interest in its podcast products. In the memo, the streaming giant claims to be the biggest podcast publisher in the US, on top of being the most-used audio podcast platform in “most corners of the world.” Spotify has certainly paid for the privilege, however, having spent over $1 billion since 2019 on tech, studios, and landing exclusive deals with the likes of Joe Rogan, Kim Kardashian, and Michelle Obama — the latter of which has already departed from the platform.
After the company reported a net loss of around $248 million for its first quarter this year, Spotify vowed that its era of big spending on podcasts is over and promised to operate more efficiently this year. It’s worth noting that while profitability remains a concern for Spotify, growth certainly isn’t — the company also reported that its platform attracts over half a billion monthly active users, a whopping 22 percent increase compared to last year. Paid subscribers also increased by 15 percent year over year, now sitting at around 210 million. The streaming giant still has a goal to hit 1 billion listeners by 2030, and its drive to procure original podcasting content, while expensive, may still prove to be a worthwhile investment.