Spotify has invested heavily in celebrity deals, including Meghan Markle. a round of layoffs this year as the streaming giant continues to reel from its expensive bets on famous presenters such as the Duke and Duchess of Sussex.
The Swedish music company said it would cut costs equivalent to about 2% of employees as part of a reorganization podcast business.
It comes less than five months after Spotify laid off about 600 employees and parted ways with Don Ostroff, the executive who oversaw its recent move into podcasts.
The cutbacks are the latest sign that Spotify can't reap the rewards. of his massive investment in the popular audio format.
In January, chief executive Daniek Ek admitted he was “a little carried away” by excessive spending, as the company lost €430 million last year.
Spotify has invested billions of euros into podcasting in recent years. , attracting stars including the Sussexes and Joe Rogan.
But the Duchess's Archetypes podcast series has struggled to gain attention while a reportedly $200 million deal with Joe Rogan has been surrounded disputes after the host spread misinformation about the Covid vaccine and used racial slurs.
In 2020, Spotify signed Joe Rogan to a $200 million deal to bring his podcast to the streaming platform. Photo: SYFY/NBCUniversal
Spotify has also spent hundreds of millions of euros buying podcast studios Parcast and Gimlet in a bid to become a leader in the sector.
But now the company will merge the two studios into a single operation as it downsizes its focus on original programming.
Instead, Spotify will rely more heavily on third-party deals.
Sahar Elhabashi, Head of Spotify's Podcasts Division, wrote on his blog: “We are expanding our collaboration with top podcasters from around the world. a globe with a personal touch, optimized for each show and creator.
“This fundamental turn away from a more uniform offering will allow us to better support the creator community.
“However, doing this requires adaptation. .. As a result, we have made the difficult but necessary decision to strategically realign our group and reduce our global podcast vertical and other features by approximately 200 people, or 2% of Spotify's workforce.”
Scaling down Spotify's podcast ambitions comes amid slowing growth in the sector, while a slump in advertising puts additional pressure on its margins.
Daniel Ek, chief executive, hinted at an increase in subscription prices this year following similar moves by Apple Music and Amazon Music, but haven't confirmed the changes yet.
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