In addition to the series of layoffs, Spotify has had to cancel 11 original podcasts from its in-house studios including “How to Save a Planet,” “Crime Show” and “Medical Murders.”
Music streaming platform Spotify Technology SA (NYSE: SPOT) has announce It plans to cut its workforce by 2% and leave up to 200 employees without jobs.
According to the announcement, Spotify is conducting this exercise as part of an effort to diversify how the company approaches partnerships with podcasters globally. This downgrade exercise is for the company’s podcast division and follows a public round of layoffs in January.
Spotify Vice President Sahar Al-Habashi announced the sad news in a note to all employees. He believes that this step will help the organization to direct appropriate support to the creator community.
According to the published statement, after consulting with its HR team on improving the organization, the company noted that it “made the difficult but necessary decision to strategically reorganize our group and reduce global podcasting and other jobs by approximately 200 people, or 2% of Spotify’s workforce.” .
Support for affected Spotify employees
Affected individuals will receive a severance package including extended healthcare coverage and immediate access to overseas shelter support. As of 2020, the digital music streaming giant had a massive workforce of 8,359 people with 4,332 in the US, based on a filing with the Securities and Exchange Commission (SEC).
However, in October 2022, the company determined that the services of 38 employees from the Gimlet Media studio and Parcast were no longer required and, accordingly, cut the number of employees. Back in January 2023, Spotify hinted at another round of layoffs, but this time, Spotify had a workforce of around 9,800.
At the current move, the layoffs are attributed to the ongoing economic slowdown. A statement from Spotify’s chief financial officer, Paul Vogel, noted that the Stockholm-based company is “clearly aware of the growing uncertainty regarding the global economy.”
In addition to the series of layoffs, Spotify has had to cancel 11 original podcasts from its in-house studios including “How to Save a Planet,” “Crime Show” and “Medical Murders.”
Going forward, Parcast and Gimlet will be integrated into a new Spotify Studios process.
Spotify is spending a fortune on its podcast unit
Spotify’s market expansion over the year has been impressive. The company has attempted to diversify and increase its profits from streaming music by massively expanding into other revenue-generating formats such as podcasts.
It should also be noted that Spotify has put a lot of effort into expanding its podcasting unit including signing sponsorship agreements with several major entities such as Meghan Markle, Duchess of Sussex, her husband Prince Harry and Joe Rogan’s online personals.
At one point, the company signed a podcast deal with popular TV personality Kim Kardashian which caused its shares to skyrocket reasonably. The music streaming company has spent more than $1 billion in strategic business acquisitions of several podcast platforms.
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