Another week, another round of layoffs. This time it’s Spotify. CEO Daniel Ek informed employees yesterday morning that the company would cut 6 percent of its workforce and said he took “full responsibility for the steps that got us here today.” The most high-profile change is the departure of chief content and advertising officer Dawn Ostroff. And while no additional shows have been cut, advertising and corporate employees, particularly under Podsights and Chartable, were laid off nearly a year after Spotify acquired both companies.
Plus (and I’m fully aware how incongruous this is, apologies), we’ve got even more announcements for Hot Pod Summit.
After years of podcast acquisitions, Spotify is going lean
Spotify, through sheer willpower (and capital), has built itself into the biggest force in the podcast industry, spending more than $1 billion acquiring studios, publishers, and ad technology. It has also relied on veteran entertainment manager Dawn Ostroff for the past four years to oversee blockbuster deals that include hits like Joe Rogan experience, Call her daddyand Batman unburied exclusively to the platform. Now, as part of the company-wide layoffs, Spotify is turning to consolidation.
Ostroff is of his own accord, according to Ek’s letter. The head of subscriptions, Alex Norstrom, who is now chief business officer, will take over her vertical content and advertising. Talk content heads Julie McNamara, Max Cutler and Bill Simmons will report to Norstrom.
“Working together, our podcasting team has revolutionized the space,” said Ostroff in a company memo yesterday. “The trajectory of this organization has been amazing, going from virtually zero market share and a handful of podcasts, to the leading platform with over five million podcasts today and a 30x increase in podcast consumption on the platform.”
But (and this is a big but), Norstrom is not a happy man. Going from someone like Ostroff, with her deep Hollywood roots, to a more quintessential tech executive like Nostrom will inevitably lead to a shift in the way the company operates. Maybe McNamara, Cutler, and Simmons will get more autonomy — or be constrained by a tighter budget.
Apart from Ostroff, the content side has avoided the worst cuts this time around. It doesn’t look like any additional shows were cut, but that’s probably because those teams were hit hard in October.
“We remain committed to building on our success in podcasting, delivering innovative features for creators and continuing to invest in R&E podcasting,” said Spotify spokesperson Rosa Oh. hot pod.
On the advertising and business side, the new layoffs were felt more deeply. Employees who had joined Spotify last year as part of Podsights and Chartable were among the divisions hit by layoffs. The acquisition of those two companies gave Spotify a better ability to measure how shows performed on the platform and put it in a better position to sell ads. And it’s working: The company increased its ad revenue by 26 percent in the first nine months of 2022 compared to the same period in 2021.
But those acquisitions added more employees in similar roles than those already at Spotify, most notably through the 2020 acquisition of Megaphone. There was “a lot of repetition in roles,” said one person affected by the layoffs who asked for to be unnamed so that they could talk freely about their former employer.
At issue is the bigger issue that Spotify still needs to find a way to make the many podcast company acquisitions – Anchor, Megaphone, Podsights, Chartable – work in harmony. According to the same former employee, this has not yet happened: “They do not yet have a concrete strategy for their podcasts. There are all these different tech stacks.”
Another Spotify employee affected by the cuts felt the same way. “There was a lot of confusion about how everything should work together,” they said, also asking to remain anonymous so they could talk about their former employer.
While the 600 employees who lost their jobs yesterday try to pick things up, the company will have to figure out how the slimmed-down organization will work. And while layoffs are always destabilizing, they didn’t come as a complete shock either. I’ve heard that in the months leading up to the budget cuts, employees were told to limit business travel to mission-critical events and have their meals and fitness allowances reduced. Meanwhile, those that remain will have to make do with the staff they have – Spotify has all vacancies removed apart from internships.
Hot Pod Summit adds another exciting guest – and a live podcast recording
Hot Pod Summit is coming up next month and we have another exciting piece of programming news to share with you: Conal ByrneCEO of iHeartMedia’s Digital Audio Group, will join us for an in-depth interview with Forget chief editor Nilay Patel. The interview will be a live recording of Decodera weekly podcast of The edge which asks executives, innovators and policymakers how they make decisions and where their industries are headed. We’re excited to host that conversation at Hot Pod Summit and try to answer some big questions that are on the minds of many in the industry.
If you received an invitation to Hot Pod Summit, just a reminder Today is the last day we can guarantee your place at the conference before we open up slots for additional guests.
And if you would like to come but are not yet on the list, please do fill in our form here by means of end of day today to let us know you are interested.
Hot Pod Summit is part of work x work’s On Air Fest, the premier cultural event for audio creatives and inspired listeners. This year’s creative festival will be held Feb. 23-25 at the Wythe Hotel in Brooklyn, featuring Audie Cornish, Kara Swisher, Talib Kweli, Krista Tippett, John Cameron Mitchell, Craig Finn, Kevin Morby, and special sessions with Audible, Paramount, Topic Studios , Simplecast, Stitcher, Pushkin and Vox Media Podcast Network and more. You can learn more and buy tickets for one or two days at www.onairfest.com. In addition, On Air will host the first-ever podcast fan experience featuring Radiolab exhibits and immersive spaces, To be over, My favorite murder, and more. The Podcast Experience runs all day from February 23 to 26. Cards up www.experiencepodcasts.com
That’s it for now. I’ll be gone next week, so you’ll hear from Jake.