Spotify’s not going for Pulitzers anymore

That is Scorching Pod, The Verge’s publication about podcasting and the audio business. Enroll right here for extra.

The mud remains to be deciding on Spotify’s newest spherical of layoffs. On Monday, Spotify introduced it was chopping 17 p.c of its workforce, or roughly 1,500 staff, as a way of creating the corporate much more environment friendly. This spherical of layoffs dwarfs the previous two this yr, with the corporate chopping about 600 staff in January and one other 200 staff (largely from podcasting) in June. Particulars are nonetheless popping out, but it surely seems the cuts are impacting individuals throughout the corporate, from product to content material to promoting.

“I notice that for a lot of, a discount of this dimension will really feel surprisingly giant given the latest optimistic earnings report and our efficiency. We debated making smaller reductions all through 2024 and 2025,” CEO Daniel Ek stated in a letter to staff. “But, contemplating the hole between our monetary objective state and our present operational prices, I made a decision {that a} substantial motion to rightsize our prices was the most suitable choice to perform our goals.”

Such steep cuts are stunning when the financial system is rising and the corporate is popping a revenue. In contrast to so many different layoff bulletins, this one didn’t spend a complete lot of time dwelling on macroeconomic components. As an alternative, it’s an unambiguous try at appeasing buyers. And within the quick time period, it’s working — Spotify’s inventory is up practically 11 p.c from the place it was at market shut on Friday.

Right this moment, I’ve bought some key takeaways from the layoffs to date.

Spotify’s not going for Pulitzers anymore

If Spotify was ever critical about making in-depth narrative podcasts, it actually isn’t now. Amongst its many cuts, the corporate has determined to cancel Heavyweight after it wraps up its present season. It’s one among Gimlet’s flagship podcasts and a beloved present amongst individuals within the business. Additionally it is chopping investigative podcast Stolen, which Gimlet launched in 2021 and went on to earn the Pulitzer Prize in Audio Reporting and a Peabody Award for it this yr.

The cancellations come after Spotify minimize reveals like Reply All and Tips on how to Save a Planet, laid off the overwhelming majority of Gimlet’s workers, and folded what remained of Gimlet into Spotify Originals in June. The one reveals that stay from Gimlet’s slate are The Journal, a day by day information co-production with The Wall Avenue Journal, and Science Vs. 

I’ve some hope that this isn’t the tip for Heavyweight or Stolen, as each reveals will likely be allowed to be shopped elsewhere. These are the sorts of reveals each podcast studio needs that they had and the type of content material Spotify needed when it bought into podcasting within the first place. The response on podcast X / Twitter / no matter has been unforgiving.

“Wow, that seems like the tip of instances,” EarBuds Podcast Collective founder Arielle Nissenblatt informed Scorching Pod. “I do know podcasts are nonetheless kinda new to many individuals however canceling #heavyweight is like canceling Breaking Unhealthy or the Sopranos,” posted Jay Cowit, former director of The Takeaway and Freakonomics. “A Pulitzer and a Peabody and one of the critically acclaimed reveals Gimlet has ever had! Actually what’s one speculated to do to maintain their job on this business,” stated former Gimlet producer Meg Driscoll.

The reply, a minimum of inside Spotify, is to make a high-margin present — one thing that’s easy to make, all the time on, and has broad attraction. You may see that within the firm’s assist of interview reveals like something goes with emma chamberlain and Name Her Daddy. To make the Sopranos of podcasting, you want time and assets, neither of that are on supply proper now.

In his letter to staff, Ek stated that “we nonetheless have too many individuals devoted to supporting work and even doing work across the work quite than contributing to alternatives with actual influence.” The “influence” in query right here doesn’t imply accolades, or even perhaps viewers. It means margin. Like we’ve got seen at WNYC with La Brega and Extra Excellent and at APM with Within the Darkish, Spotify has determined {that a} present that requires an excessive amount of time, manpower, and cash to make will not be price it, regardless of the acclaim. 

The top of brand name security is gone

The promoting aspect is experiencing steep cuts, regardless of CFO Paul Vogel pointing to advert income progress as a brilliant spot in final quarter’s earnings. Among the many executives let go is Dave Byrne, who joined Spotify final yr because the director of world promoting platform integrity after main model security at TikTok. The purpose of brand name security is to guarantee that an organization’s adverts don’t find yourself on podcasts or playlists with which they don’t wish to be affiliated.

That sounds boring, but it surely’s essential! If the business goes to become profitable in a critical method, advertisers should be assured that their adverts are reaching the appropriate audiences and aren’t supporting content material they think about dangerous. You may take a look at this interview Amrita Khalid did with Byrne in October in regards to the firm’s method to model security. 

“The protection of our neighborhood, together with our listeners, creators, and advertisers, stays a high precedence,” Spotify spokesperson Erin Types informed Scorching Pod. “Model security at Spotify has all the time been a workforce effort and can proceed to be overseen by leaders throughout our product and coverage orgs.”

It doesn’t seem that there’s any govt left on the firm devoted particularly to model security. After I requested Types about this, she stated that groups throughout the corporate deal with model security and pointed to VP of product Per Sandell and director of monetization product advertising and marketing Chloe Wix as key executives on this house.

This might not be the tip of Spotify’s M&A

One thing that stopped me in Ek’s notice was the indication that, after so many mergers that put so many individuals out of their jobs, the corporate remains to be not achieved with acquisitions.

“Embracing this leaner construction can even permit us to take a position our earnings extra strategically again into the enterprise,” he writes. “With a extra focused method, each funding and initiative turns into extra impactful, providing higher alternatives for achievement.”

After I requested Spotify whether or not “investments” means extra M&A, Types stated, “We are going to proceed to allocate capital in the direction of the best return alternatives for the enterprise, each internally and externally.”

That’s all for at present. I’ll see Insiders on Thursday and the remainder of you subsequent week.