Spotify started the week off with an announcement that the company would cut about 200 jobs in their podcast vertical as part of a strategic realignment. The cuts represent about 2% of Spotify’s total workforce, and they follow layoffs done in January 2023 and October 2022. The company also announced that it would consolidate its podcast studios.
Sahar Elhabashi, VP of Podcast Business, for Spotify notified company staff in a memo that was also published to Spotify’s Newsroom. Elhabashi explained that the company has learned from its foray into the podcasting world, and they were ready to begin the next phase of their podcast strategy.
“We are expanding our partnership efforts with leading podcasters from across the globe with a tailored approach optimized for each show and creator. 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,” Elhabashi said.
Prior to the announcement, affected employees received an invitation from HR to have one-on-one conversations. Spotify will support the laid-off staff with “generous” severance packages, extended healthcare coverage, and outplacement support.
Combining Parcast and Gimlet Studios
As part of the strategic realignment, Spotify is combining Parcast and Gimlet Media to produce “high-impact originals,” including Stolen, The Journal, Science vs. Heavyweight, Serial Killers, and Conspiracy Theories. Spotify acquired Parcast, a podcast network specializing in crime, mystery and science fiction, for an estimated $56 million in 2019. Spotify also acquired Gimlet Media, an independent producer of podcast content, for an estimated $200 million in 2019. The studios will fall under the purview of Spotify Studios with a focus on high quality content that drives audiences to Spotify and attracts advertisers to monetize their podcast strategy.
“Our continued success in growing the podcast ecosystem is predicated on the necessity that the Spotify Machine is always in motion. And with these changes, we will accelerate into the next chapter for podcasts on Spotify with strong discovery and podcast habits for users, thriving monetization and audience growth for creators, and a valuable, high-margin business for Spotify,” added Elhabashi.
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Podcast progress since 2019
With Spotify’s investment in podcasting, the company has made significant strides in growing this as a revenue stream. They shared the following statistics in their June 5 announcement.
- Spotify is the most-used audio podcast platform in most regions of the world, and it is the number one podcast publisher in the US.
- Spotify has over 100 million podcast listeners.
- Since Spotify began podcasting, over half a billion people have listened to a podcast on Spotify.
- Podcast consumption has grown more than 1,400%.
- 165 of Spotify’s original and licensed shows hit number one on their charts across 99 markets in 2022.
- Podcast ad revenue hit high double-digit growth from 2021 to 2022.
Insider Take
While layoffs are always unfortunate, a strategic realignment after years of investing in podcasts and their podcast studios makes sense for Spotify. They made a lot of investments in 2019 and 2020, maximized their value, and evaluated what worked and what didn’t. They’re now ready to shift gears and, like so many other tech companies, they are trimming costs to get a greater return on their investment. It looks like they plan to continue to seek out and produce original content. They may also eliminate podcasts that aren’t doing as well, like they did in October when they canceled 10 shows from Parcast and Gimlet, including How to Save a Planet, Medical Murders and Urban Legends. As they explained, Spotify is always in motion.
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