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 moves 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 business employees, particularly under Podsights and Chartable, were laid off nearly a year after Spotify bought both companies.
Plus (and I’m fully aware of how incongruous this is, apologies), we have some more Hot Pod Summit announcements.
After years of podcast acquisitions, Spotify gets weaker
Spotify built itself into the biggest force in the podcast industry through sheer force of will (and capital), spending more than $1 billion on acquiring studios, publishers and ad tech. He has also relied on veteran entertainment executive Dawn Ostroff for the past four years to oversee successful deals that produced hits such as The Joe Rogan Experience, Call her dadAND Batman Unburied exclusive to the platform. Now, as part of company-wide layoffs, Spotify is turning to consolidation.
Ostroff is against her will, according to Ek’s letter. Taking over its content and advertising vertical is head of subscriptions Alex Norstrom, who is now chief business officer. Heads of chat content 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 astonishing, going from virtually zero market share and a small share of podcasts, to the leading platform with more than five million podcasts today and a 30-fold increase in podcast consumption on the platform.”
But (and this is a big one), Norstrom is not a satisfied guy. The transition from having someone like Ostroff, with her deep Hollywood roots, to a more typical tech executive like Nostrom will inevitably result in a change in the way the business operates. Perhaps McNamara, Cutler and Simmons will have more autonomy — or may be limited by a tighter budget.
Other than Ostroff, the content side has avoided the worst of the cuts this time around. It doesn’t appear that any additional shows have been cut, but that’s probably because those teams were hit hard in October.
“We remain committed to building on our podcast success, providing innovative features for creators and continuing to invest in podcast O&E,” said Spotify spokeswoman Rosa Oh. Hot Pod.
On the advertising and business side, the new layoffs were felt more deeply. Employees who had come to Spotify as part of Podsights and Chartable last year were among the divisions hit by the layoffs. Acquiring these two companies gave Spotify a greater ability 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, particularly from the Megaphone acquisition in 2020. There was “a lot of duplication in job functions,” according to a person affected by the layoffs, who asked not to be named so they could discuss their former employer freely.
It’s about the bigger issue that Spotify still has to find a way to make its multiple podcast business acquisitions — Anchor, Megaphone, Podsights, Chartable — work in harmony. According to the same former employee, that hasn’t happened yet: “They don’t have an actual strategy for their podcasts yet. There are all these different technology stacks.”
Another Spotify employee affected by the cuts felt similarly. “There was a lot of confusion about how everything was supposed to work together,” they said, also asking to remain anonymous so they could speak about their former employer.
As the 600 employees who lost their jobs yesterday scramble to pick up the pieces, the company will once again have to figure out how the weaker organization will function. And while layoffs are always unsettling, they also didn’t come as a complete shock. I’m hearing that in the months before the cuts, employees were told to limit business travel to mission-critical events and saw reductions in food and fitness stipends. Meanwhile, those who remain will have to make do with the staff they have – Spotify has axed all of its job postings except for internships.
Hot Pod Summit adds another exciting guest – and a live podcast recording
The Hot Pod Summit is coming up next month and we have some more exciting programming news to share with you all: Conal ByrneCEO of iHeartMedia’s Digital Audio Group, will join us for an in-depth interview with eve editor in chief Nilay Patel. The interview will be a live recording of Decodera weekly podcast from threshold that asks executives, innovators and policymakers how they make decisions and where their industries are headed. We’re excited to host that conversation at the Hot Pod Summit and try to answer some big questions on the minds of many across the industry.
If you received an invitation to the Hot Pod Summit, a quick reminder today it’s the last day we can guarantee your place at the conference before we open up places for other guests.
And if you’d like to come but aren’t already on the list, please fill out our form here end of day today to let us know you are interested.
The Hot Pod Summit is part of work x work’s 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. You can learn more and purchase single and double day tickets at www.onairfest.com. Plus, On Air is hosting the first podcast fan experience with exhibits and immersive rooms from Radiolab, On Being, My favorite kill, and more. The Podcast Experience runs all day from February 23rd to 26th. Tickets at www.experiencepodcasts.com
That’s all for now. I’ll be out next week so you’ll hear from Jake.