Spotify Restructures Podcast Division

Spotify announced a restructuring of its podcast division at the beginning of June. In a press release, Sahar Elhabashi, VP, Head of Podcast Business, stated that Spotify was changing its podcast strategy to focus on “delivering even more value for creators (and users!).”

As a result of the restructuring, 200 employees were laid off, amounting to approximately 2% of Spotify’s global workforce. This comes after a first round of layoffs in January, when Spotify let go of 6% of its employees.

In addition to the layoffs, Spotify announced the merger of Parcast and Gimlet into Spotify Studios, which will continue to focus on building original content. Spotify acquired both Parcast and Gimlet in 2019. Parcast focuses on creating content related to true crime, such as its podcast series Crimes of Passion. Gimlet produces content more related to journalism and interviews.

While all the changes have some concerned about Spotify’s interest in continuing to invest in creating content, Elhabashi confirms that “a key component of our focus [is] on creators, we remain committed to original programming.”

Since 2019, the streaming service reported that podcast consumption has grown by 1400%, podcast content increased from 200,000 titles to over 5 million, and podcast ad revenue grew by more than 10% from 2021 to 2022. Overall however, Spotify reported less than expected year-on-year revenue growth in its 2023 first quarter results.

To further boost the performance of its podcast division, Spotify’s strategy includes creating more tailored advertising proposals, boosting partnerships with external podcasters, and expanding Spotify for Podcasters. Spotify for Podcasters provides analytic capabilities that aim to help content creators reach a larger audience, whether on Spotify or beyond.

Spotify has invested heavily in building its podcast business since 2019, spending over $1 billion in upgrading technology assets and studios and signing exclusive deals with celebrities such as Joe Rogan, Kim Kardashian, and Michelle Obama – although Michelle Obama has since left the platform.

Spotify podcasts have over 100 million listeners and remain a key growth area to help Spotify reach its target of 1 billion users by 2030.