Spotify to Lay Off 200 Employees in Podcast Strategy Shift

Spotify, the audio streaming platform, mentioned on Monday that it deliberate to put off about 200 individuals, together with staff on the fashionable podcast studios Gimlet Media and Parcast.

The 2 p.c reduce to the corporate’s work power is a part of a “strategic realignment” of the podcast division, Sahar Elhabashi, the pinnacle of podcasts at Spotify, mentioned in a memo to Spotify workers on Monday.

Since early 2019, the variety of podcast reveals on Spotify has grown to greater than 5 million from about 200,000, Ms. Elhabashi mentioned in a revised model of the memo that Spotify posted on its web site.

That interval was a growth period for the podcasting trade, with media firms making massive investments to develop their choices. Spotify, which relies in Stockholm, purchased Gimlet for $230 million in 2019 and The Ringer for about $200 million in 2020, sending a sign that it had broadened its ambitions past music streaming. This flurry of spending has cooled within the final yr, with firms slicing podcast jobs and curbing budgets.

Ms. Elhabashi mentioned Spotify’s job cuts have been a part of an effort to supply extra choices for podcast creators. As a part of the restructuring, Gimlet and Parcast might be absorbed into Spotify Studios, she mentioned.

Gimlet was based in 2014 and is thought for beloved podcasts resembling “Reply All,” which was canceled in 2021 after some workers criticized its office tradition, and “Heavyweight,” which helps individuals confront unresolved points from their pasts.

In May, Gimlet’s employees, notably the host Connie Walker, was awarded a Pulitzer Prize in audio reporting for the present “Stolen: Surviving St. Michael’s.” In the podcast, Ms. Walker investigated her father’s expertise, and people of lots of of different Indigenous kids, in Canada’s residential faculty system. Spotify mentioned it might proceed to provide the present.

Parcast is behind podcasts together with the true crime present “Disappearances” and “Dare to Lead,” hosted by the vulnerability researcher and creator Brené Brown.

Gimlet and Parcast, beneath Spotify Studios, and The Ringer will proceed to make new reveals and produce podcasts, Ms. Elhabashi mentioned.

“Our continued success in growing the podcast ecosystem is predicated on the necessity that the Spotify Machine is always in motion,” Ms. Elhabashi mentioned. “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.”

In an announcement on Monday, Gimlet and Parcast’s unions, that are a part of the East department of the Writers Guild of America, criticized Spotify for its dealing with of the acquisition of the 2 studios. “They wasted that opportunity: canceling shows with dedicated audiences, leaving half-finished projects to die on the vine and giving teams little direction as to what they actually wanted to see produced,” the assertion mentioned.

“Spotify acquired Gimlet because it saw something special in the studio,” the unions mentioned. “But instead of building on that legacy, the company undermined it, and four years later Gimlet is no more.”

The Parcast union mentioned its staff’ ultimate months on the firm “were plagued by a lack of directions and transparency, confusion, and announcements that were backtracked hours or days after being made.”

Spotify declined to touch upon the unions’ assertion.

Podcast downloads elevated by 20 p.c in 2022 in contrast with the yr earlier than, in keeping with a January report by Triton Digital, an audio viewers measuring firm, however funding within the trade is slowing.

Podcast publishers, together with Vox Media and Pushkin Industries, have introduced layoffs this yr. Other media firms, resembling Amazon, SiriusXM and NPR, have reduce podcast budgets within the final yr.

Spotify laid off dozens of podcast staff at Gimlet and Parcast in October 2022. In January, Spotify introduced that it was shedding about 600 workers.