Spotify, the streaming audio platform, said Monday it planned to lay off about 200 people, including workers at popular podcast studios Gimlet Media and Parcast.
The 2 percent cut in the company’s workforce is part of a “strategic realignment” of the podcast division, Sahar Elhabashi, Spotify’s head of podcasts, said in a memo to Spotify employees on Monday.
Since the beginning of 2019, the number of podcast shows on Spotify has grown from about 200,000 to more than 5 million, Elhabashi said in a revised version of the note that Spotify posted on its website.
That period was a boom era for the podcast industry, with media companies investing heavily to expand their offerings. Stockholm-based Spotify bought Gimlet for $230 million in 2019 and The Ringer for about $200 million in 2020, sending a signal that it had expanded its ambitions beyond music streaming. This flurry of spending has cooled in the past year, with companies cutting podcast jobs and slashing budgets.
Ms Elhabashi said Spotify’s job cuts were part of an effort to give podcasters more choice. As part of the restructuring, Gimlet and Parcast will be absorbed by Spotify Studios, she said.
Gimlet was founded in 2014 and is known for beloved podcasts like “Reply All,” which was canceled in 2021 after some employees criticized its work culture, and “Heavyweight,” which helps people deal with unresolved issues from their past. .
In May, Gimlet staff, in particular presenter Connie Walker, received a pulitzer prize in audio reports for the show “Stolen: Surviving St. Michael’s.” In the podcast, Ms. Walker investigated her father’s experience and that of hundreds of other Aboriginal children in Canada’s residential school system. Spotify said it would continue to produce the show.
Parcast is behind podcasts including the true crime show “Disappearances” and “Dare to Lead,” hosted by vulnerability researcher and author Brené Brown.
Gimlet and Parcast, under Spotify Studios, and The Ringer will continue to make new shows and produce podcasts, Ms Elhabashi said.
“Our continued success in growing the podcast ecosystem is rooted in the need for the Spotify Machine to always be on the go,” said Ms. Elhabashi. “And with these changes, we will accelerate the next chapter of podcasts on Spotify with strong podcast and discovery habits for users, thriving monetization and audience growth for creators, and valuable, high-margin business for Spotify.”
In a sentence On Monday, the Gimlet and Parcast unions, which are part of the eastern branch of the Writers Guild of America, criticized Spotify for its handling of the acquisition of the two studios. “They squandered that opportunity: canceling shows with dedicated audiences, leaving half-finished projects to die on the grapevine, and giving teams little direction as to what they actually wanted to see produced,” the statement said.
“Spotify acquired Gimlet because it saw something special in the studio,” the unions said. “But instead of building on that legacy, the company undermined it, and four years later, Gimlet is no more.”
The Parcast union said its workers’ last months at the company “were plagued by a lack of direction and transparency, confusion, and announcements that were pushed back hours or days after the fact.”
Spotify declined to comment on the unions’ statement.
Podcast downloads are up 20 percent in 2022 compared to the previous year, according to a January report from Triton Digitalan audio audience measurement company, but investment in the industry is slowing.
Podcast publishers including Vox Media and Pushkin Industries have announced layoffs this year. Other media companies, including Amazon, SiriusXM and NPR, have cut podcast budgets in the past year.
Spotify laid off dozens of podcast workers at Gimlet and Parcast in October 2022. In January, Spotify announced that it would lay off about 600 employees.