Another week, another round of layoffs. This time it’s Spotify. CEO Daniel Ek told employees yesterday morning that the company would be shedding 6 per cent of its workforce and said he takes “full responsibility for the steps that got us here today”. The most notable change is the departure of Chief Content and Advertising Officer Dawn Ostroff. And while no other shows were cut, advertising and business staff, most notably at Podsights and Chartable, were laid off nearly a year after Spotify acquired both companies.
Also (and I’m fully aware how inappropriate this is, sorry) we have some more announcements for the Hot Pod Summit.
After years of podcast acquisition, Spotify is slimming down
Spotify has grown into the biggest force in the podcast industry through sheer willpower (and capital), spending more than $1 billion acquiring studios, publishers, and advertising technology. It has also relied on veteran entertainment executive Dawn Ostroff for the past four years to oversee blockbuster deals that have brought hits like the Joe Rogan Experience, Call Her Daddy and Batman Unburyed exclusively to the platform. Now, as part of its company-wide layoffs, Spotify is turning to consolidation.
According to Ek’s letter, Ostroff is beside himself. Alex Norstrom, Chief Business Officer, is taking over their content and ad verticals. Talk content heads Julie McNamara, Max Cutler and Bill Simmons will report to Norstrom.
“By working together, our podcasting team has revolutionized the space,” said Ostroff in a company memo yesterday. “This organization’s journey has been amazing, from virtually zero market share and a handful of podcasts to the #1 platform with more than five million podcasts today and a 30x increase in podcast consumption on the platform.”
But (and this is a big but) Norstrom isn’t a happy guy. Moving from someone like Ostroff, with her deep Hollywood roots, to a more typical tech executive like Nostrom will inevitably change the way the business operates. Perhaps McNamara, Cutler and Simmons have more autonomy — or could be constrained by tighter budgets.
Ostroff aside, the content side avoided the worst of the cuts this time. It doesn’t appear that 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, providing innovative features for developers, and continuing to invest in O&E podcasts,” Spotify spokeswoman Rosa Oh told Hot Pod.
On the advertising and business side, the new layoffs were felt more. Employees who joined Spotify as part of Podsights and Chartable last year were among the areas hit by layoffs. The acquisition of these two companies gave Spotify a better way to measure the performance of shows on the platform and put it in a better position to sell ads. And it’s working — the company grew 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 to those already working at Spotify, most notably the 2020 acquisition of Megaphone. According to one affected by the layoffs, who asked not to be named so she could be free able to talk about their previous employer, there was “a lot of repetition in work functions”.
At stake is the bigger problem that Spotify has yet to figure out a way to reconcile its many podcast business acquisitions — Anchor, Megaphone, Podsights, Chartable. According to the same former employee, that hasn’t happened yet: “They don’t really have a strategy for their podcasts yet. There are all these different tech stacks.”
Another Spotify employee who was affected by the cuts had a similar experience. “There was a lot of confusion about how everything was supposed to 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 up the pieces, the company once again has to figure out how the leaner organization is supposed to work. And while layoffs are always destabilizing, they didn’t come as a total shock either. I’ve heard that in the months leading up to the cuts, employees were told to limit business travel to business-critical events, and saw cuts to their meal and fitness stipends. Meanwhile, those who stay will have to make do with their staffing — Spotify has removed all of its job postings except for internships.
Hot Pod Summit adds another exciting guest – and a live podcast replay
With the Hot Pod Summit coming up next month, we have another exciting piece of programming news to share with all of you: Conal ByrneCEO of iHeartMedia’s Digital Audio Group, joins us for an in-depth interview with Verge’s Editor-in-Chief Nilay Patel. The interview will be recorded live decoder, a weekly podcast by The Verge that asks business leaders, innovators and policymakers how they make decisions and where their industries are headed. We’re excited to host this conversation at Hot Pod Summit and try to answer some big questions on the minds of many in the industry.
If you received an invitation to the Hot Pod Summit, a quick reminder today is the last day we can guarantee your place at the conference before we release slots for additional guests.
And if you’d like to come but aren’t on the list yet, please fill out our form here today end of the day to let us know your interest.
Hot Pod Summit is part of the work x work On Air Fest, the premier cultural event for audio creators and inspired listeners. This year’s creative festival takes place February 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. Visit www.onairfest.com to learn more and purchase single and two-day tickets. Also, On Air is hosting the first-ever podcast fan experience featuring exhibits and immersive spaces from Radiolab, On Being, My Favorite Murder and more. The podcast experience runs all day February 23-26. Tickets at www.experiencepodcasts.com
That’s all for now. I won’t be there next week, so you’ll be hearing from Jake.