Spotify will be laying off 200 employees, or about 2% of its total workforce, as part of a global reorganizing effort, the company said Monday. Most of these layoffs will come from the brand's podcast division.
The brand made "a strategic realignment of our group and reduce our global podcast vertical and other functions," Sahar Elhabashi, Spotify's vice president and head of podcast business, said in a press release. Elhabashi added that Spotify's podcast vertical had become "focused on delivering even more value for creators," which "begins with maximizing consumption from the massive audience we've established through format innovation and ensuring that more creators in more places achieve success."
"Unfortunately, this means saying goodbye to close colleagues and friends," Elhabashi said.
Two of the company's popular podcast studios, Gimlet Media and Parcast, will merge into Spotify Studios, with their own branding being removed, according to the press release. A third popular studio, the sports-oriented The Ringer, will keep operating independently.
Since its founding in 2006, the Stockholm-headquartered Spotify has become one of the largest audio streaming companies in the world, but has never turned an annual profit. Music royalties expert Phil Bird told The Washington Post the brand was seemingly in "perennial start-up mode."
While Spotify first focused on dominating the music streaming space, it has "spent heavily to expand its podcast unit in the last three years," CNBC reported. The company has reportedly spent at least $526 million on four acquisitions of podcast studios since 2020.
The company had a global workforce of 8,359 people in 2020, according to an SEC filing, with 4,432 of them being based in the United States.