Spotify lays off 200 employees in Podcast Strategy Shift
Spotify, the audio streaming platform, said Monday it planned to lay off about 200 people, including employees of popular podcast studios Gimlet Media and Parcast.
The 2 percent cut in the company’s workforce is part of a “strategic realignment” of its podcast division, Sahar Elhabashi, the head of podcasts at Spotify, said in a memo to Spotify employees on Monday.
Since the beginning of 2019, the number of podcast shows on Spotify has grown to more than five million from about 200,000, Ms Elhabashi said in a revised version of the memo that Spotify posted on its website.
That period was a boom for the podcasting industry, with media companies making major investments to expand their offerings. Stockholm-based Spotify bought Gimlet for $230 million in 2019 and The Ringer for about $200 million in 2020, sending a signal that it had broadened its ambitions beyond music streaming. This flurry of spending has cooled over the past year, with companies cutting podcast jobs and slashing budgets.
Ms Elhabashi said the job cuts at Spotify were part of an effort to provide more options for podcast creators. As part of the restructuring, Gimlet and Parcast will be incorporated into Spotify Studios, she said.
Founded in 2014, Gimlet is known for beloved podcasts such as Reply All, which was canceled in 2021 after some employees criticized the work culture, and Heavyweight, which helps people face unresolved issues from their past.
In May, Gimlet’s staff, particularly host Connie Walker, was rewarded a Pulitzer Prize in audio reportage for the show “Stolen: Surviving St. Michael’s.” In the podcast, Ms. Walker explored her father’s experiences and those of hundreds of other Indigenous children in Canada’s residential school system. Spotify said it would continue to produce the show.
Parcast is behind podcasts, including the true crime show “Disappearances” and “Dare to Lead,” hosted by vulnerability researcher and author Brené Brown.
Gimlet and Parcast, under Spotify Studios, and The Ringer will continue to create new shows and produce podcasts, Ms Elhabashi said.
“Our continued success in growing the podcast ecosystem is based on the need for the Spotify engine to be always moving,” said Ms. Elhabashi. “And with these changes, we will accelerate into the next chapter for podcasts on Spotify with strong discovery and podcasting habits for users, thriving revenue generation and audience growth for creators, and valuable, high margin for Spotify.”
In a statement On Monday, the unions of Gimlet and Parcast, which are part of the East branch of the Writers Guild of America, criticized Spotify for its handling of the acquisition of the two studios. “They squandered that opportunity: canceling shows with committed audiences, letting half-finished projects die on the vine, and giving teams little direction on what they actually wanted to see produced,” the statement said.
“Spotify acquired Gimlet because it saw something special in the studio,” the unions said. “But instead of building on that legacy, the company undermined it, and four years later, Gimlet is no more.”
The Parcast union said its employees’ final months at the company were “plagued by a lack of direction and transparency, confusion and announcements that were rolled back hours or days later.”
Spotify declined to comment on the union statement.
Podcast downloads will increase 20 percent in 2022 from the previous year, according to the newspaper a January report by Triton Digitala company that measures audio audiences, but investment in the industry is declining.
Podcast publishers including Vox Media and Pushkin Industries have announced layoffs this year. Other media companies, such as Amazon, SiriusXM and NPR, have cut podcast budgets in the past year.
Spotify laid off dozens of podcast employees at Gimlet and Parcast in October 2022. In January, Spotify announced it would lay off about 600 employees.