Spotify’s not going for Pulitzers anymore

That is Sizzling Pod, The Verge’s e-newsletter about podcasting and the audio trade. Enroll right here for extra.

The mud remains to be selecting Spotify’s newest spherical of layoffs. On Monday, Spotify introduced it was reducing 17 p.c of its workforce, or roughly 1,500 staff, as a method of creating the corporate much more environment friendly. This spherical of layoffs dwarfs the previous two this yr, with the corporate reducing about 600 staff in January and one other 200 staff (principally from podcasting) in June. Particulars are nonetheless popping out, nevertheless it 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 current constructive earnings report and our efficiency. We debated making smaller reductions all through 2024 and 2025,” CEO Daniel Ek mentioned in a letter to staff. “But, contemplating the hole between our monetary purpose 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 targets.”

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

In the present day, I’ve received 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 definitely isn’t now. Amongst its many cuts, the corporate has determined to cancel Heavyweight after it wraps up its present season. It’s one in all Gimlet’s flagship podcasts and a beloved present amongst individuals within the trade. It is usually reducing 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 exhibits like Reply All and The best way 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 exhibits that stay from Gimlet’s slate are The Journal, a every day information co-production with The Wall Avenue Journal, and Science Vs. 

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

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

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

In his letter to staff, Ek mentioned that “we nonetheless have too many individuals devoted to supporting work and even doing work across the work fairly than contributing to alternatives with actual affect.” The “affect” in query right here doesn’t imply accolades, or even perhaps viewers. It means margin. Like we have now 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 is just not price it, irrespective of the acclaim. 

The pinnacle of name security is gone

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

That sounds boring, nevertheless it’s essential! If the trade goes to earn cash in a critical method, advertisers have to be assured that their advertisements are reaching the appropriate audiences and aren’t supporting content material they contemplate dangerous. You possibly can take a look at this interview Amrita Khalid did with Byrne in October concerning the firm’s strategy to model security. 

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

It doesn’t seem that there’s any government left on the firm devoted particularly to model security. After I requested Types about this, she mentioned that groups throughout the corporate handle 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 will not be the top of Spotify’s M&A

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

“Embracing this leaner construction will even permit us to speculate our income extra strategically again into the enterprise,” he writes. “With a extra focused strategy, each funding and initiative turns into extra impactful, providing larger alternatives for fulfillment.”

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

That’s all for right this moment. I’ll see Insiders on Thursday and the remainder of you subsequent week.