Coinspeaker
Spotify Cuts Headcount by 2%, Offers Severance Package to 200 Staffs
Music streaming platform Spotify Technology SA (NYSE: SPOT) has announced plans to cut its workforce by 2% leaving up to 200 employees without jobs.
According to the announcement, Spotify is carrying out this exercise as part of an effort to diversify how the company handles partnerships with podcasters globally. This retrenchment exercise is peculiar to the podcast division of the company and is coming after a general round of layoffs in January.
Spotify vice president Sahar Elhabashi announced the sad news in a memo to all staff. He believes that the move would help the organization channel the appropriate support to the creator community.
Per the published statement, after consulting with its HR team on optimizing the organization, the firm note it “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 2% of Spotify’s workforce”.
Support for the Affected Spotify Employees
Affected individuals will receive a severance package including extended healthcare coverage and immediate access to outplacement support. As of 2020, the digital music streaming giant had a huge workforce of 8,359 people with 4,332 of them in the United States, based on a Securities and Exchange Commission (SEC) filing.
However, in October 2022, the company decided that the services of 38 employees from its Gimlet Media and Parcast podcast studio were no longer required, hence, a headcount reduction. Again in January 2023, Spotify hinted at another layoff round but this time around, Spotify had a workforce of around 9,800.
In the current move, the layoff was attributed to a sustained economic slowdown. A statement by Paul Vogel, the Chief Financial Officer of Spotify suggested that the Stockholm-based company is “clearly aware of the increasing uncertainty regarding the global economy”.
In addition to the series of layoffs, Spotify was forced to cancel 11 original podcasts from its in-house studios including ‘How to Save a Planet’, ‘Crime Show’, and ‘Medical Murders’.
Moving forward, Parcast and Gimlet will be combined into a new Spotify Studios operation.
Spotify Spends a Fortune on Podcast Unit
Spotify’s market expansion drive over the year has been outstanding. The company attempted to diversify and increase its earnings from music streaming via aggressive expansion to other revenue-generating formats like podcasts.
Also, it is worth noting that Spotify has made so much effort into expanding its podcast unit including signing sponsorship deals with many top entities like Meghan Markle, the Duchess of Sussex, her husband Prince Harry, and Joe Rogan, the online personality.
At one time, the firm inked a podcast deal with renowned TV personality Kim Kardashian and this caused its shares to jump reasonably. The music streaming firm has spent over $1 billion in strategic business acquisitions of numerous audio broadcasting platforms.
Spotify Cuts Headcount by 2%, Offers Severance Package to 200 Staffs
