Spotify plans to slash around 200 workforces in its second layoff move, intending to adjust its new business strategy.
Heaptalk, Jakarta — After performing an earlier layoff wave toward its 600 employees last January 2023, a Sweden-based music streaming company, Spotify, declared to conduct the second job-cutting move by slashing around 200 workforces. This newest layoff represents 2%, which impacts its podcast business unit.
Responding to this matter, the Head of Spotify’s Podcast Business, Sahar Elhabashi, explained that this second layoff decision is a corporate adaptation move. The company is designing more business models to help creators generate more revenue.
“We made a complex but necessary decision to re-strategize our business and downsize our global podcast team. This impacts around 200 people or 2% of Spotify’s workforce,” Sahar said in a written statement on the official website. (06/06)
Senior leaders and the Human Resources team are still considering the most optimal team for their last endeavor. Nevertheless, ultimately, they conducted a layoff resolution for hundreds of company podcast team employees.
As it is known, this music streaming platform has spent a lot of money building its podcast business in recent years to increase the engagement level and attract more advertisers. However, this strategy has influenced the two-fold of company’s operational costs, exceeding the former revenue last year. Rising interest rates and high inflation also had an impact on company revenues.
Apart from putting significant effort into advancing its podcast division, Spotify has also spent its operating costs worth US$500 million to redesign its application and augment podcast-producing studios in 2019.
Further, Spotify has distributed several exclusive podcasts, such as the “Joe Rogan Experience” and “Call Her Daddy” podcast by Alex Cooper. However, the company has reduced the number of exclusive podcasts. The podcast deal with self-help guru Brene Brown, sports journalist Jemele Hill, and deals with Barack and Michelle Obama are about to expire.
To realign its podcast unit’s business, the company plans to merge Parcast and Gimlet studios into a single division, Spotify Studios, which will produce Spotify’s original work. According to Shar, Spotify also claims the company will take a customized approach for each production instead of the previous approach. As a result, this strategic move has gained a positive response from the market, proven by an increase in share value of 3.03% in yesterday’s trading.
