Spotify lays off 200 employees, gutting Gimlet Media and Parcast

Spotify has eliminated 200 roles, mostly in its podcast division, gutting two popular studios it acquired a few years ago.

The head of Spotify's podcast division, Sahar Elhabashi, told employees in an internal memo on Monday that the streaming company was making a "fundamental pivot" toward creator-focused podcasting, according to an amended version of the memo posted to the company's website. As part of that "strategic realignment," Elhabashi said, the company was eliminating about 200 roles in its podcast division and "other functions." The layoffs amount to about a 2 percent cut to the company's workforce, he said.

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Parcast and Gimlet Media, two podcast studios that Spotify acquired in 2019, will be combined into an operation called Spotify Studios, which Elhabashi said will keep producing shows such as "The Journal," a daily news show by Gimlet and the Wall Street Journal, as well as "Stolen," a series about the residential school system in Canada that was used to forcibly assimilate the country's Indigenous populations.

The staff of Gimlet had last month received a Pulitzer Prize for "Stolen."

In a statement responding to the layoffs, the union representing Gimlet and Parcast guild members, the Writers Guild of America, East, said that "as of today, Gimlet and Parcast no longer exist." Members were informed Monday morning that the studios were being "absorbed into Spotify Studios," it said.

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The union noted that Spotify, which is based in Stockholm, had paid nearly $300 million to acquire the two studios, but then "wasted that opportunity" through missteps including canceling popular shows, it said. Spotify also restricted many shows to be exclusively broadcast on its platforms, "limiting the amount of revenue our studios could bring in," the statement said.

Competitive strategies like exclusivity "haven't really worked in an environment of so, so many podcasts," said Amanda Lotz, a media consultant and academic based in Australia. She said the layoffs were "mainly tied to podcasts becoming overvalued very quickly," adding that the cuts were a "natural adjustment rather than anything bigger."

"Podcasts can't defy the law of supply and demand," said Gabriel Kahn, a journalism professor at the University of Southern California who studies the media industry and consults on strategy.

"Supply has proliferated. Demand has not," he said. "Pair that with a dip in advertising spending and something has to give."

Spotify did not immediately respond to a request for comment. Its stock was up 3 percent at close on Monday.

The move comes after Spotify last year laid off staff as it canceled 11 shows made by Gimlet and Parcast, including "How to Save a Planet," a popular climate change podcast. The number of new podcasts dropped by nearly 77 percent from 2020 to 2022, according to Listen Notes, a podcast database.

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Spotify's announcement that it was focusing more on "creators" aligns with its moves in recent months to focus more on individual personalities rather than shows like news programming or true-crime series that had previously been a focus of the podcasting industry. Emma Chamberlain, a social media influencer-turned-celebrity, reached a deal last year to bring her podcast "Anything Goes," a mix of personal commentary, self help and other advice, to Spotify. Videos of the show are available exclusively on the streaming platform, which is better known for audio than visuals.

But Spotify's investment in individual creators has at times backfired. Joe Rogan — the controversial host of "The Joe Rogan Experience," a podcast that has become synonymous with an archetype of moderately conservative, young White men — sparked wide backlash last year against Spotify, which was hosting his show exclusively, after he spouted misinformation about the coronavirus. The controversy spurred some creators to pull their music or podcasts from Spotify — the hashtag #DeleteSpotify began trending — and caused internal dissent among employees who said they were embarrassed to work for the streaming company amid the outcry.