Yahoo Finance Spotify cuts 200 more jobs as celebrity audio deals fail to pay off
Spotify will cut 200 jobs from its podcast business in its second round of redundancies this year, as the streaming giant continues to reel from its expensive bets on celebrity presenters such as the Duke and Duchess of Sussex.
The Swedish music company said it will make the cuts, equivalent to around 2pc of its workforce, as part of a reorganisation of its podcast business.
It comes less than five months after Spotify laid off around 600 employees and parted ways with Dawn Ostroff, the executive who oversaw its recent move into podcasting.
The cuts are the latest sign that Spotify is failing to reap the benefits of its heavy investment in the popular audio format.
In January, chief executive Daniek Ek admitted he got a “little carried away” with the spending binge as the company sank to a €430m loss last year.
Spotify has pumped billions of euros into podcasting in recent years, signing up stars including the Sussexes and Joe Rogan.
But the Duchess’s Archetypes podcast series has struggled to gain traction. After debuting as Spotify’s number one new podcast last summer, by November it had fallen to number 22 in the charts.
The Joe Rogan deal, worth a reported $200m, has been beset with controversies after the host spread Covid vaccine misinformation and used a racial slur.
Spotify also spent hundreds of millions of euros buying podcast studios Parcast and Gimlet as it looked to establish a leading position in the sector.
But the company will now merge the two studios into a single operation as it scales back its focus on original programming.
Instead, Spotify will rely more heavily on deals with third-party producers.
Sahar Elhabashi, head of Spotify’s podcast division, wrote in a blog post: “We are expanding our partnership efforts with leading podcasters from across the globe with a tailored approach optimised for each show and creator.
“This fundamental pivot from a more uniform proposition will allow us to support the creator community better.
“However, doing so requires adapting ... As a result, we have made the difficult but necessary decision to make a strategic realignment of our group and reduce our global podcast vertical and other functions by approximately 200 people, or 2pc of Spotify’s workforce.”
The scaling back of Spotify’s podcast ambitions comes amid a slowdown in the sector, while an advertising downturn is putting further pressure on its margins.
Daniel Ek, the chief executive, has hinted at an increase in subscription prices this year following similar moves by Apple Music and Amazon Music, but has yet to confirm the changes.
