Spotify will cut 200 jobs from its podcast business due to financial losses from celebrity presenters like the Duke and Duchess of Sussex. Spotify invested heavily in celebrities podcasting deals.
The Swedish music company will cut around 2% of its workforce as part of a reorganization of its podcast business.
Spotify laid off 600 employees and parted ways with Dawn Ostroff, the executive in charge of its podcasting move, less than five months ago.
Spotify’s cuts indicate that it’s not benefiting from its investment in audio.
CEO Daniel Ek overspent and the company lost €430m last year.
Spotify invested billions in podcasting and signed up popular figures like the Sussexes and Joe Rogan.
The Duchess’s Archetypes podcast series has not gained traction. The podcast debuted as Spotify’s top new podcast but fell to number 22 by November.
Joe Rogan’s $200m deal has faced controversies due to his spread of Covid vaccine misinformation and use of a racial slur.
Spotify spent hundreds of millions of euros buying podcast studios Parcast and Gimlet to establish a leading position in the sector.
The company will merge two studios into one as it reduces focus on original programming.
Spotify will rely more on third-party producers.
Spotify’s podcast division head, Sahar Elhabashi, announced in a blog post that they are partnering with global podcasters using a customized approach for each show and creator.
We’re changing our approach to better support content creators.
Adapting is necessary… We will reduce our global podcast and other functions by approximately 200 people, or 2% of Spotify’s workforce due to a strategic realignment.
Spotify is scaling back its podcast ambitions due to a slowdown in the sector and an advertising downturn.
Daniel Ek, the CEO, suggested a possible subscription price increase this year, but hasn’t confirmed it yet.