Spotify to Lay Off 200 Employees in Podcast Strategy Shift

Spotify, the audio streaming platform, said on Monday that it planned to lay off about 200 people, including workers at the popular podcast studios Gimlet Media and Parcast.

The 2 percent cut to the company’s work force is part of a “strategic realignment” of the podcast division, Sahar Elhabashi, the head of podcasts at Spotify, said in a memo to Spotify employees on Monday.

Since early 2019, the number of podcast shows on Spotify has grown to more than five million from about 200,000, Ms. Elhabashi said in a revised version of the memo that Spotify posted on its website.

That period was a boom era for the podcasting industry, with media companies making large investments to expand their offerings. Spotify, which is based in Stockholm, bought Gimlet for $230 million in 2019 and The Ringer for about $200 million in 2020, sending a signal that it had broadened its ambitions beyond music streaming. This flurry of spending has cooled in the last year, with companies cutting podcast jobs and curbing budgets.

Ms. Elhabashi said Spotify’s job cuts were part of an effort to provide more options for podcast creators. As part of the restructuring, Gimlet and Parcast will be absorbed into Spotify Studios, she said.

Gimlet was founded in 2014 and is known for beloved podcasts such as “Reply All,” which was canceled in 2021 after some employees criticized its workplace culture, and “Heavyweight,” which helps people confront unresolved issues from their pasts.

In May, Gimlet’s staff, notably the host Connie Walker, was awarded a Pulitzer Prize in audio reporting for the show “Stolen: Surviving St. Michael’s.” In the podcast, Ms. Walker investigated her father’s experience, and those of hundreds of other Indigenous children, in Canada’s residential school system. Spotify said it would continue to produce the show.

Parcast is behind podcasts including the true crime show “Disappearances” and “Dare to Lead,” hosted by the vulnerability researcher and author Brené Brown.

Gimlet and Parcast, under Spotify Studios, and The Ringer will continue to make new shows and produce podcasts, Ms. Elhabashi said.

“Our continued success in growing the podcast ecosystem is predicated on the necessity that the Spotify Machine is always in motion,” Ms. Elhabashi said. “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.”

In a statement on Monday, Gimlet and Parcast’s unions, which are part of the East branch of the Writers Guild of America, criticized Spotify for its handling of the acquisition of the two studios. “They wasted that opportunity: canceling shows with dedicated audiences, leaving half-finished projects to die on the vine and giving teams little direction as to what they actually wanted to see produced,” the statement said.

“Spotify acquired Gimlet because it saw something special in the studio,” the unions said. “But instead of building on that legacy, the company undermined it, and four years later Gimlet is no more.”

The Parcast union said its workers’ final months at the company “were plagued by a lack of directions and transparency, confusion, and announcements that were backtracked hours or days after being made.”

Spotify declined to comment on the unions’ statement.

Podcast downloads increased by 20 percent in 2022 compared with the year before, according to a January report by Triton Digital, an audio audience measuring company, but investment in the industry is slowing.

Podcast publishers, including Vox Media and Pushkin Industries, have announced layoffs this year. Other media companies, such as Amazon, SiriusXM and NPR, have cut podcast budgets in the last year.

Spotify laid off dozens of podcast workers at Gimlet and Parcast in October 2022. In January, Spotify announced that it was laying off about 600 employees.