Spotify has revealed it will further reduce its headcount, with about 2% of its workers getting laid off in the process.
The roughly 200 Spotify employees that are getting cut work in the audio streaming giant’s podcast division and "other functions," according to a publicly posted internal memo from the head of Spotify’s podcast business. They received notification on Monday that they would lose their jobs.
The head of podcast business, Sahar Elhabashi, attributed the layoffs to Spotify changing its approach for the unit.
"We are focused on ensuring that each step in this process is taken with the utmost empathy and respect," Elhabashi wrote of the headcount reductions. "The company will support these individuals with generous severance packages, including extended Healthcare coverage and immediate access to outplacement support."
Spotify reported in its most recent annual report that it counted 8,359 full-time workers on average on its payroll in 2022.
Earlier in the year, the company shed 600 from its overall headcount, a figure reports had put around 9,800. It did so as it was working to "drive more efficiency, control costs, and speed up decision-making," Spotify had said.
SPOTIFY TO LAY OFF 6% OF WORKFORCE AS NUMBER OF TECH JOB CUTS GROWS
Spotify said Monday it had plans for "expanding our partnership efforts with leading podcasters from across the globe with a tailored approach optimized for each show and creator," a move that required a "strategic realignment" of the company’s podcasting group.
The memo said the new podcast strategy involves "format innovation" and "ensuring that more creators in more places achieve success" to maximize content consumption.- The analytics capabilities on its Spotify for Podcasters platform will see expansion, as will the business models it offers for creator monetization opportunities, it added.
The Sweden-headquartered company will now have Spotify Studios, an umbrella under which its Parcast and Gimlet podcast studios will fall, Elhabashi said. Julie McNamara, head of global podcast studios at Spotify, will remain at the helm there.
Spotify reported having more than 5 million podcast shows on its streaming platform, which a total of more that 100 million people tuned in to listen.
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Elhabashi said it "remain[s] committed to original programming" like "Heavyweight," "Stolen" and "Serial Killers."
In late April, the company said its revenue hit €3.04 billion in the first quarter, an increase from €2.66 billion in the same three-month period the prior year. Its net loss was €225 million, according to its quarterly filing.
Spotify CFO Paul Vogel said during the earnings call that the company expects to "continue to see the podcasting loss continue to get better throughout the year." The targets for podcasting to break even and reach profitability given by the company in June "have not changed," he added.
He had said in June the company’s forecast had the gross margin for podcasting "turning profitable over the next one to two years, with a meaningful ramp from that point onwards."
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