Spotify to cut 200 positions in podcast business, citing 'strategic realignment'
Spotify (SPOT) announced on Monday that it is eliminating 200 jobs, or 2% of its workforce, within its podcast division.
In a blog post, the company said the layoffs come amid "the next phase of our podcast strategy" as it looks to "[expand] our partnership efforts with leading podcasters from across the globe with a tailored approach optimized for each show and creator."
"This fundamental pivot from a more uniform proposition will allow us to support the creator community better," Spotify Vice President Sahar Elhabashi wrote in the post. "However, doing so requires adapting; over the past few months, our senior leadership team has worked closely with HR to determine the optimal organization for this next chapter."
"As a result, we have made the difficult but necessary decision to make a strategic realignment of our group and reduce our global podcast vertical and other functions by approximately 200 people, or 2% of Spotify’s workforce," Elhabashi continued.
Monday's announcement comes after Spotify cut 6% of its workforce, or about 600 employees, earlier this year. At that time, Spotify also announced a business restructuring that led to the departure of chief content officer and advertising business officer, Dawn Ostroff.
Under her leadership, Ostroff led the bulk of Spotify's pricey, A-list podcast deals, including a reported $200 million deal with Joe Rogan.
Spotify shares were initially flat on the news before closing up about 3% to end Monday's trading session.
Spotify's most recent financial results came in mixed with a wider-than-expected loss but a beat on gross margins. The company previously told Yahoo Finance it is looking to improve its profitability rates beginning in 2023 on a gross margin and operating income basis, categorizing 2022 as a peak investment year as the platform dives into medium- to long-term investments.
One of those heavily invested areas has been podcasts.
Spotify has spent $1 billion pushing into the podcast market over the past four years, signing on celebrities like the Obamas, Prince Harry, and Kim Kardashian. The company paid $230 million to acquire podcast studio Gimlet in 2019. Spotify then paid a reported $200 million to bring Joe Rogan exclusively to the platform, and another $200 million for The Ringer in 2020.
The layoff announcements, coupled with a company reorganization focused on "efficiency," raise the question of whether Spotify could be looking to pivot away from that strategy.
Last week, Bloomberg reported Jemele Hill and her "Unbothered" podcast will be departing Spotify at the conclusion of her contract later this summer. Spotify, which has seen multiple Black podcasters depart the platform in recent years, had been the exclusive distributor of Hill's podcast since 2019.
Alexandra is a Senior Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com
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