Spotify slashes 200 more jobs after Harry and Meghan Archetypes podcast deal fails to pay off
6 June 2023, 06:43 | Updated: 6 June 2023, 10:05
Spotify is set to make huge cuts to its podcast business, the second round of redundancies this year. It comes as the company grapples with the consequences of its costly bets on celebrity presenters, including the Duke and Duchess of Sussex.
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The Swedish company announced that around 200 jobs, equivalent to approximately 2% of its workforce, will be eliminated as part of a major restructuring effort within its podcast division.
This decision comes less than five months after Spotify laid off about 600 employees and bid farewell to Dawn Ostroff, the podcast boss who signed up Harry and Meghan.
The job cuts serve as yet another indication that Spotify is struggling to reap the rewards of its hefty investments in the increasingly popular audio format.
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Earlier this year, CEO Daniel Ek admitted that he may have gone overboard with spending, as the company suffered a staggering €430 million loss in the previous year.
Over the past few years, Spotify has pumped billions of euros into the podcasting realm, securing deals with big-name stars like the Sussexes and Joe Rogan.
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However, the Duchess of Sussex's podcast series, Archetypes, has failed to make waves, while the Joe Rogan deal, rumoured to be worth $200 million, has been mired in controversies as the host spread Covid vaccine misinformation and used a racial slur.
In addition to these high-profile signings, Spotify acquired podcast studios Parcast and Gimlet for hundreds of millions of euros, aiming to establish a dominant position in the podcasting industry.
However, the company now plans to merge these two studios into a single entity as it scales back its focus on original programming, opting to strike more deals with third-party producers.
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Sahar Elhabashi, head of Spotify's podcast division, addressed the changes in a blog post, stating, "We are expanding our partnership efforts with leading podcasters from across the globe, tailoring our approach to optimize each show and creator. This shift allows us to better support the creator community."
Nevertheless, this strategic repositioning necessitates a difficult decision to realign the group and reduce the global podcast vertical, as well as other functions, resulting in the loss of around 200 positions, or 2% of Spotify's total workforce.
While CEO Daniel Ek has hinted at potential subscription price increases this year, following similar moves by Apple Music and Amazon Music, no official confirmation regarding these changes has been released thus far.
