Spotify Technology SA will lay off 2 per cent of its employees, or 200 people, primarily in its podcast division, the company said in a public blog post. Sahar Elhabashi, vice president, head of podcast business, made the announcement, saying the cuts would help the streaming service become an “optimal organization” for the next stage of its talk-content business. 

Two of the company’s studios, Gimlet Media and Parcast, will eventually merge into Spotify Studios with the branding for those networks being removed from programming. The Ringer, a third studio, will continue to operate independently, a spokesperson said in an emailed comment. Additional cuts will impact finance and talent acquisition.

“Our continued success in growing the podcast ecosystem is predicated on the necessity that the Spotify Machine is always in motion,” Elhabashi wrote. “And with these changes, we will accelerate into the next chapter for podcasts on Spotify with strong discovery and podcast habits for users, thriving monetization and audience growth for creators, and a valuable, high-margin business for Spotify.”

The layoffs will be accompanied by an executive shuffle. Liliana Kim will lead current content for the reorganized Spotify Studios, and Liz Gateley will head up development. Julie McNamara will continue overseeing the organization of the studios, and Bill Simmons will remain as managing director of The Ringer and head of podcast innovation and monetization.

Among the listed shows that will remain in production are The Journal, Science Vs, Serial Killers and Conspiracy Theories.

Recently, employees have speculated internally that layoffs were in the works. A post on the anonymous workplace social media network Blind had been circulating, saying a reorganization was planned for the podcast studios. Adding to the prevailing sense of unease, the studios have yet to receive annual budgets.

In 2019, Spotify acquired Gimlet and Parcast. In 2020, it acquired The Ringer to add sports and culture content to its mix of programming. Since the initial deals, the company has gone on to spend over US$1 billion as part of a strategic effort to dominate the podcast space.

Elhabashi noted in her post that there are now 100 million podcast listeners on Spotify, representing 10 per cent growth, and that consumption has grown more than 1,400 per cent. But in recent months, the organization has undergone significant reorganizations and strategy shifts. The former Chief Content Officer Dawn Ostroff left the company in January during a round of layoffs that impacted 6 per cent of staff. While Ostroff initially focused on signing big-name talent, many have since not re-signed their exclusive deals. 

Last week, Bloomberg News reported that former sportscaster Jemele Hill would leave the network. The Obamas’ production company, Higher Ground, and Ava DuVernay have also departed from the service’s podcasting roster. Now, the organization wants to focus instead on offering its programming widely across podcast platforms rather than keeping shows exclusive to Spotify.