9.9 C
New York
December 3, 2023

Spotify’s latest layoffs target its podcast business

Spotify’s latest layoffs target its podcast business

Spotify is laying off 200 employees in its podcast division. The downsizing, announced on Monday (June 5), affects roughly 2% of the streaming service’s in-person workforce.

Paulina Porizkova on approach to Instagram

Sahar Elhabashi, the head of Spotify’s podcast business, announced the cuts on the company’s website, saying they reflect changes to its relationship with podcasters contracted to make original content.

Elhabashi added that the staffing changes would happen on Monday, with affected employees supported by “generous” severance packages and extended healthcare coverage. Spotify previously announced layoffs in January, citing shifts in spending priorities.

Spotify went all in on podcasts. Is it working?

Daniel Ek, Spotify’s founder and CEO, declared in 2019 that podcasts were the future of the company’s revenue stream.

Over the next three years, Spotify reportedly invested more than $1 billion in podcast production and development, including exclusive audio rights to podcasts created by Prince Harry, Kim Kardashian, and former US president Barack Obama.

The company also purchased several podcast powerhouses. Among them: Gimlet Media—owner of the mega-popular Reply All podcast—for $340 million and The Ringer—founded by legendary sports journalist Bill Simmons—for almost $200 million. As well, Spotify bought the rights to Joe Rogan’s standalone podcast for more than $200 million.

However, it remains to be seen if this investment is paying off. Despite adding 83 million monthly users last year, Spotify reported a net revenue loss of €430 million ($461 million), a ten times higher than in 2021, mostly due to an increase in operating expenses.

Although the company hasn’t announced the profits from its podcast division for 2022, the medium only brought in about $215 million in 2021, meaning that podcasts accounted for less than 2% of its $12.4 billion in revenue that year.

Spotify’s podcast investment, by the digits:

#1: Spotify’s rank among podcast publishers in the US.

100 million: Podcast listeners on Spotify. The company reported 515 million monthly users in the first fiscal quarter of 2023.

5 million: Podcast shows available to stream on Spotify.

Recent layoffs in Big Tech:

March 31: Netflix confirms it plans to lay off an unspecified number of employees.

April 3: Apple, one of the last holdouts in the industry trend, announces it will lay off a small number of employees on its corporate retail teams.

April 27: Dropbox, the data storage company, announces it is laying off 500 employees, or 16% of its staff.

May 4: E-commerce giant Shopify announces it is laying off 10% of its workforce, or about 1,000 people.

May 9: Linkedin announces it is cutting 716 jobs and plans to shutter InCareer, its standalone China workforce app.

May 12: Nuro, an autonomous delivery robot startup, announces it will lay off a third of its workforce and pivot away from commercial operations, focusing instead on research and development.

May 24: Meta announces 6,000 layoffs, building on earlier downsizing as part of its so-called “year of efficiency.”

Related stories:

Streaming is saving the music industry—but still barely making money

Researchers analyzed 700-plus songs known to give people chills. Here’s the playlist

Napster paved the way for our streaming-reliant music industry

Read More