At the end of January, Spotify joined the growing wave of layoffs in the technology sector and decided to dismiss 600 employees. While these layoffs have been the most recent, they are not the first to occur in recent months. In October, the company also decided to let go of employees from its internal podcasting companies, Gimlet and Parcast.
Now, Spotify has decided to change its podcast strategy and merge these two companies, in a process that will result in the layoff of 200 employees, which accounts for 2% of the company’s workforce.
“In recent months, our management team has closely collaborated with HR to determine the optimal organization for this next chapter,” Spotify stated in a press release. “As a result, we have made the difficult but necessary decision to strategically readjust our group and reduce our global podcast vertical and other functions by approximately 200 people, or 2% of Spotify’s workforce.”
Spotify’s big bet on podcasts didn’t come cheap. The company has invested tens of millions of dollars so far solely in securing big names for its podcasts, including Joe Rogan, who hosts one of the most popular podcasts in the United States, former President Barack Obama, and the Kardashians.
However, despite what it might seem, the move has paid off for Spotify (apparently). In the statement, the company claims to have reached the milestone of 100 million podcast listeners across 5 million distinct programs. Additionally, Spotify declares that it has experienced “double-digit growth” in its advertising revenue between 2021 and 2022.
Beyond that “strategic readjustment,” it is not entirely clear why Spotify has decided to dismiss some of its staff when podcasts are performing well. As previously explained, many companies choose to lay off employees simply to balance their financial statements for shareholders, using the “revenue per employee” ratio. Could this be the case?
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