Despite being the top publisher for podcasts in the U.S. -- according to the audio-streaming platform -- Spotify is axing 200 jobs in its podcast unit as part of a “strategic realignment” after reporting losses in its first quarter.
The job cuts -- which amount to around 2% of Spotify's workforce -- are a “necessary” step toward capitalizing on the company's evolving podcast ecosystem, explained Spotify's vice president and head of podcasts Sahar Elhabashi in a recent memo.
According to Elhabashi, the company will be focused on expanding its partnership efforts with leading podcasters around the world “with a tailored approach optimized for each show and creator,” in an effort to support the creator community and capitalize on its growing podcast ecosystem.
The company is also planning to broaden its analytics capabilities within Spotify For Podcasters to grow its audience while “leveling up” its advertising offerings and introducing more business models “to help more creators make meaningful money from their work.”
Spotify also mentioned its ongoing commitment to original programming, with plans to combine Parcast and Gimlet -- two major podcast studios the company acquired in 2019 -- into a renewed Spotify Studios operation that will continue to produce popular shows like Stolen, The Journal, Science Vs, Heavyweight, Serial Killers and Conspiracy Theories.
In addition, The Ringer -- a show Bill Simmons sold to Spotify for $250 million in 2020 -- will continue to produce original programming as well, the memo stated.
This is not the first round of job cuts for Spotify’s podcast division. Prior to this round of layoffs, Spotify cut 6% of its 9,800-person workforce in January and around one-third of union members from both Parcast and Gimlet in October 2022.
Even though the streaming platform continues to grow in users, attracting half a billion monthly active users (a 22% increase from 2022) and 210 million paid subscribers, Spotify reported a net loss of around $248 million for its first quarter in 2023, promising to operate more efficiently moving forward and discontinuing major spending on podcasts.