What Spotify's Recent Layoffs Tell Us About the Future of Podcasting

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Last week Spotify announced job cuts for 6% of its staff, and chief content and advertising business officer Dawn Ostroff is among those leaving the company.

According to CEO Daniel Ek, the company's 2022 operating expenses outpaced revenue. One large expense is the company's big investments in the podcasting space. But has the company seen a return on this investment?

Over the past four years, Spotify invested $1 billion into its podcasting efforts bringing in high-profile exclusive shows such as:

• The Joe Rogan Experience
• Call Her Daddy by Alex Cooper
• Archetypes with Meghan Markle
• The Michelle Obama Podcast

Spotify has also acquired other podcasting-related companies including:

• Anchor, a platform for podcast hosting and distribution
• Chartable, which tracks podcast chart rankings and reviews
• Podsights, an insights and attribution platform
• Megaphone, a tool for publishing, monetization, and show growth

Last fall, Spotify canceled 11 in-house podcasts produced by Gimlet and Parcast and laid off 5% of its podcasting staff. Between the rounds of layoffs, and a string of platform-exclusive podcast cancellations, recent events at Spotify could signal upcoming changes for the podcast industry.

2020 was a record-breaking year for podcasting, with over 1 million new shows launching that year. By 2022, the number of new podcasts launched dropped by 80%, signaling a saturation point for the medium.

With the future of advertising dollars and audience attention in limbo, companies may be thinking twice before investing heavily into corporate and platform-exclusive shows.

Podcasting certainly isn't going anywhere, though I predict the industry will see an increased focus on independent podcasters who rely on YouTube streams and audience funding using platforms such as Patreon to fund their work.

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