For the second time this year, Spotify has announced a significant round of layoffs. The audio-focused platform has cut 200 jobs in its podcasting division as it consolidates acquired companies like Parcast and Gimlet under a single banner.
The layoffs were announced in a public memo attributed to Spotify VP and Head of Content Business Sahar Elhabashi. According to Elhabashi, the affected employees make up about 2% of Spotify’s total workforce.
Elhabashi said that the cuts will allow Spotify to enter the “next phase” of its podcasting business. In practical terms, Spotify is realigning audio programming assets and establishing Spotify Studios as the central focus of its podcast production wing. Going forward, Parcast and Gimlet originals will be developed by Spotify Studios. The result, according to Elhabashi, will be the launch of a “uniform proposition” that can better facilitate Spotify’s partnerships while also supporting its creator community.
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“Our continued success in growing the podcast ecosystem is predicated on the necessity that the Spotify Machine is always in motion,” Elhabashi wrote. “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.”
The new Spotify Studios is described as a “renewed” version of an entity that existed until 2022. The first version of Spotify Studios housed the original shows the company produced during the early phases of its podcasting push. After the Gimlet and Parcast acquisitions, Spotify sidelined its homegrown programs and eventually shuttered its Studios amid a round of layoffs.
By bringing back its Studios, Spotify hopes to make its audio business more efficient. That’s a major priority for a company that spends freely and regularly reports losses during its quarterly earnings calls. At the end of Q1 2023, Spotify announced a quarterly loss of €225 million (about $248 million).
As it tightens its belt, Spotify plans to continue its investment in its audio programming businesses. Over the past year, the Stockholm-based company has rolled out video podcasting worldwide, debuted a new hub for audio creators, and opened up state-of-the-art recording facilities. In her memo, Elhabashi noted that Spotify now has more than 100 million podcast listeners — and the audio platform is looking to set itself up for more growth.
