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Spotify to cut 200 jobs in podcasting division

By Nithya Bose in US business news, posted June 6, 2023

Spotify is to conduct another round of layoffs, this time affecting two percent of its workforce, around 200 jobs.

It highlights ongoing challenges in the podcast industry's profitability.

Sahar Elhabashi, VP and head of podcast business, said the cuts will impact the podcast vertical and other functions as it seeks to reorganize the unit to focus on partnerships with its top creators.

She said Spotify will merge its podcast studios and Gimlet into a revitalized entity called Spotify Studios.

Podcasting has experienced immense popularity over the past five years, capturing the attention of young, educated, and affluent listeners.

The acquisition of Gimlet, Parcast, and the Ringer by Spotify ignited a competition among media and tech companies such as iHeart, Sirius, Amazon, and Audacy.

This restructuring follows another round of layoffs at Spotify.

In January, the company announced plans to axe approximately 600 employees, or six percent of its workforce.

It was part of broader cost-cutting measures after significant spending during the pandemic.

During last year’s investor day, the firm unveiled an ambitious plan to reach one billion listeners by 2030 and generate $100 billion in annual revenue with a 40 percent gross margin.

Executives expressed optimism podcasts would become profitable by 2024.

While prioritizing growth and investment, Spotify has struggled to turn a profit consistently.

Since 2019, the company has invested over $1 billion in podcast deals.

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One of Spotify's objectives in podcasting is to monetize its shows and expand its advertising revenue by selling ads across other networks and publishers.

The company has heavily invested in its ad business, developing technology to insert streaming ads for more accurate tracking and creating its own ad marketplace, enabling advertisers to target specific audiences rather than individual shows.

Spotify has recently moved away from exclusivity arrangements for some podcasts, opting to distribute them across various platforms.

This strategic shift aims to broaden the audience and increase the advertising potential of Spotify's shows.

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