Comment on this storyComment
Spotify has cut 200 jobs, mostly in its podcast division, gutting two popular studios it acquired a few years ago.
Spotify podcast division head Sahar Elhabashi told employees in an internal memo on Monday that the streaming company is making a “fundamental shift” toward creator-centric podcasting, according to an amended version of the memo published on published on the company’s website. As part of this “strategic realignment,” Elhabashi said, the company has eliminated about 200 jobs in its podcast division and “other functions.” The layoffs would equate to a roughly 2 percent reduction in the company’s workforce, he said.
Parcast and Gimlet Media, two podcast studios Spotify acquired in 2019, will be combined into one company called Spotify Studios, which Elhabashi says will continue to produce shows like The Journal, a daily news show from Gimlet and The Wall Street Journal. and “Stolen,” a series about Canada’s residential school system, which was used to forcibly assimilate the country’s indigenous people.
Gimlet employees received a Pulitzer Prize for “Stolen” last month.
in one opinion In response to the dismissals, the union of Gimlet and Parcast guilds, the Writers Guild of America, East declared that “As of today, Gimlet and Parcast no longer exist”. The members were informed on Monday morning that the studios “merged into Spotify Studios,” it said.
The union pointed out that Stockholm-based Spotify paid nearly $300 million to acquire the two studios, but then “missed” the opportunity through missteps such as canceling popular shows, it said. Spotify also restricted many shows from airing exclusively on its platforms, thereby limiting “the amount of revenue our studios could generate,” the statement said.
Competitive strategies like exclusivity “didn’t really work in an environment with so many podcasts,” said Amanda Lotz, an Australia-based media consultant and researcher. She said the layoffs were “mainly because podcasts were becoming overrated very quickly,” adding that the cuts were “more of a natural adjustment than anything bigger.”
“Podcasts can’t defy the law of supply and demand,” said Gabriel Kahn, a professor of journalism at the University of Southern California who studies the media industry and advises on strategy.
“The supply has increased. The demand didn’t do it,” he said. “If you combine that with a drop in advertising spending, then something has to give way.”
Spotify didn’t immediately respond to a request for comment. The stock was up 3 percent at the close on Monday.
The move comes after Spotify laid off employees last year due to the cancellation of 11 shows from Gimlet and Parcast, including How to Save a Planet, a popular climate change podcast. According to Listen Notes, a podcast database, the number of new podcasts dropped nearly 77 percent from 2020 to 2022.
Spotify’s Joe Rogan problem illustrates the rocky transition from music streamer to media producer
Spotify’s announcement of a greater focus on “creators” falls in line with the company’s efforts in recent months to increase its focus on individual personalities, rather than on shows such as news programs or true-crime series, which had previously been the focus of the podcast industry. Emma Chamberlain, a social media influencer turned celebrity, struck a deal last year to bring her Anything Goes podcast, a mix of personal commentary, self-help and other advice, to Spotify. Videos of the show are exclusively available on the streaming platform, which is better known for audio than visuals.
But Spotify’s investment in individual YouTubers has proved a failure at times. Joe Rogan — the controversial host of “The Joe Rogan Experience,” a podcast that has become synonymous with an archetype of moderately conservative young white males — sparked major backlash against Spotify exclusively hosting his show last year after revealing misinformation had spread about the coronavirus. The controversy prompted some YouTubers to remove their music or podcasts from Spotify – the hashtag #DeleteSpotify was starting to trend – and sparked internal disagreements among staff, who said they were embarrassed amid outcry for the streaming company to work.