Spotify is cutting off 200 jobs, as the company is having loss in business after years of heavy investment. The company will cut off people from it’s podcast unit in the second round of layoffs.
This layoff will affect about 2% of the music-streaming giant’s workforce and aligns Spotify with the likes of Meta platforms and Roku. Other giant platforms also cut off jobs for the second time in response to an uncertain economy.
Spotify had spend aggresively to build up its podcast business in recent years, hoping the higher engagement levels offered by the format will bring in more advertisers.
Interest Rates & High Inflation
As compare to revenue of company, the operating expenditure of spotify is surging from last year. Inflation is increasing and interest rate is decreasing, causing businesses to spend more on ads.
Earlier in 2023, Spotify cut off their 6% workforce and announced the departure of Dawn Ostroff. Sahar Elhabashi, who heads the podcast business said that, “Company has made the difficult but necessary decision to make a strategic realignment”.
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Spotify also said it will merge its Parcast and Gimlet studios into a single Spotify Studios Division, which will produce Spotify originals. The company would now take a tailored approach for each show and creator.