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Spotify’s not going for Pulitzers anymore

December 6, 2023
in Technology
Spotify’s not going for Pulitzers anymore
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This is Hot Pod, The Verge’s newsletter about podcasting and the audio industry. Sign up here for more.

The dust is still settling on Spotify’s latest round of layoffs. On Monday, Spotify announced it was cutting 17 percent of its workforce, or approximately 1,500 employees, as a means of making the company even more efficient. This round of layoffs dwarfs the past two this year, with the company cutting about 600 employees in January and another 200 employees (mostly from podcasting) in June. Details are still coming out, but it appears the cuts are impacting people across the company, from product to content to advertising.

“I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance. We debated making smaller reductions throughout 2024 and 2025,” CEO Daniel Ek said in a letter to employees. “Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives.”

Such steep cuts are shocking when the economy is growing and the company is turning a profit. Unlike so many other layoff announcements, this one did not spend a whole lot of time dwelling on macroeconomic factors. Instead, it is an unambiguous attempt at appeasing investors. And in the short term, it is working — Spotify’s stock is up nearly 11 percent from where it was at market close on Friday.

Today, I’ve got some key takeaways from the layoffs so far.

Spotify’s not going for Pulitzers anymore

If Spotify was ever serious about making in-depth narrative podcasts, it certainly isn’t now. Among its many cuts, the company has decided to cancel Heavyweight after it wraps up its current season. It is one of Gimlet’s flagship podcasts and a beloved show among people in the industry. It is also cutting 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 year.

The cancellations come after Spotify cut shows like Reply All and How to Save a Planet, laid off the vast majority of Gimlet’s staff, and folded what remained of Gimlet into Spotify Originals in June. The only shows that remain from Gimlet’s slate are The Journal, a daily news co-production with The Wall Street Journal, and Science Vs. 

I have some hope that this is not the end for Heavyweight or Stolen, as both shows will be allowed to be shopped elsewhere. These are the kinds of shows every podcast studio wishes they had and the kind of content Spotify wanted when it got into podcasting in the first place. The reaction on podcast X / Twitter / whatever has been unforgiving.

“Wow, that feels like the end of times,” EarBuds Podcast Collective founder Arielle Nissenblatt told Hot Pod. “I know podcasts are still kinda new to many people but canceling #heavyweight is like canceling Breaking Bad or the Sopranos,” posted Jay Cowit, former director of The Takeaway and Freakonomics. “A Pulitzer and a Peabody and one of the most critically acclaimed shows Gimlet has ever had! Truly what is one supposed to do to keep their job in this industry,” said former Gimlet producer Meg Driscoll.

The answer, at least within Spotify, is to make a high-margin show — something that is straightforward to make, always on, and has broad appeal. You can see that in the company’s support of interview shows like anything goes with emma chamberlain and Call Her Daddy. To make the Sopranos of podcasting, you need time and resources, neither of which are on offer right now.

In his letter to employees, Ek said that “we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact.” The “impact” in question here does not mean accolades, or perhaps even audience. It means margin. Like we have seen at WNYC with La Brega and More Perfect and at APM with In the Dark, Spotify has decided that a show that requires too much time, manpower, and money to make is not worth it, no matter the acclaim. 

The head of brand safety is gone

The advertising side is experiencing steep cuts, despite CFO Paul Vogel pointing to ad revenue growth as a bright spot in last quarter’s earnings. Among the executives let go is Dave Byrne, who joined Spotify last year as the director of global advertising platform integrity after leading brand safety at TikTok. The point of brand safety is to make sure that a company’s ads don’t end up on podcasts or playlists with which they don’t want to be affiliated.

That sounds boring, but it’s important! If the industry is going to make money in a serious way, advertisers need to be assured that their ads are reaching the right audiences and aren’t supporting content they consider harmful. You can check out this interview Amrita Khalid did with Byrne in October about the company’s approach to brand safety. 

“The safety of our community, including our listeners, creators, and advertisers, remains a top priority,” Spotify spokesperson Erin Styles told Hot Pod. “Brand safety at Spotify has always been a team effort and will continue to be overseen by leaders across our product and policy orgs.”

It does not appear that there is any executive left at the company dedicated specifically to brand safety. When I asked Styles about this, she said that teams across the company address brand safety and pointed to VP of product Per Sandell and director of monetization product marketing Chloe Wix as key executives in this space.

This may not be the end of Spotify’s M&A

Something that stopped me in Ek’s note was the indication that, after so many mergers that put so many people out of their jobs, the company is still not done with acquisitions.

“Embracing this leaner structure will also allow us to invest our profits more strategically back into the business,” he writes. “With a more targeted approach, every investment and initiative becomes more impactful, offering greater opportunities for success.”

When I asked Spotify whether “investments” means more M&A, Styles said, “We will continue to allocate capital towards the highest return opportunities for the business, both internally and externally.”

That’s all for today. I’ll see Insiders on Thursday and the rest of you next week.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : The Verge – https://www.theverge.com/2023/12/5/23989879/spotify-heavyweight-gimlet-stolen-pulitzer-layoff-daniel-ek

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