Spotify Announces Major Layoffs in Podcast Division Amid Corporate Restructuring

Spotify, the popular music streaming platform, has announced another round of layoffs, this time significantly impacting its podcast division. The move is part of a broader corporate reorganization strategy, which includes the merging of Parcast and Gimlet Studios, two popular podcast networks previously acquired by Spotify.

Sahar Elhabashi, Spotify’s head of the podcast division, revealed in an internal memo that the company is making changes leading to a workforce reduction of 2%, affecting approximately 200 jobs. Employees impacted by this decision have been notified and invited to discuss the situation with the HR department.

Elhabashi explained that the company is expanding its partnership efforts with leading podcasters worldwide, optimizing its approach for each show and creator. This pivot from a uniform proposition is expected to better support the creator community. However, it necessitates adaptation, leading to the difficult decision of reducing the global podcast vertical and other functions by approximately 200 people.

Spotify has assured that affected employees will receive generous severance packages, including extended healthcare coverage and immediate access to outplacement support.

In 2019, Spotify made a significant investment in podcasts, acquiring popular podcast networks like Parcast and Gimlet Media. This move into first-party content was costly, with the company spending around $200 million for Gimlet Media and $56 million for Parcast. However, the company is now scaling back this original content strategy, as evidenced by the merging of Parcast and Gimlet into Spotify Studios.

Despite the layoffs, some podcasts are still actively being developed, including ‘Stolen’, ‘The Journal’, ‘Science Vs’, ‘Heavyweight’, ‘Serial Killers’, and ‘Conspiracy Theories’. The Ringer, another content company acquired by Spotify, will remain a separate business unit from Spotify Studios.

Spotify’s podcast business boasts 100 million listeners across 5 million shows, with podcast ad revenue experiencing high double-digit growth from 2021 to 2022. The company is now focusing on delivering more value for creators and users through format innovation and ensuring more creators achieve success in more places.

Last year, Spotify canceled 11 original podcasts and laid off some of its podcast staff, likely focusing on hits and making room for new shows. The current move is more significant and could lead to substantial changes in Spotify’s original content strategy in the coming months.

Reported by TechCrunch

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