Spotify layoffs in its podcast division will affect 200 employees

Spotify Layoffs in its Podcast Division will Affect 200 Employees

Spotify has announced its second round of layoffs, resulting in the reduction of 200 jobs from its podcast unit. This move, which accounts for roughly 2% of the company’s workforce, brings Spotify in line with Meta Platforms and Roku, who have also implemented job cuts recently.

Despite the Spotify layoffs news, it’s shares experienced a slight increase of approximately 0.5% during early trading, surpassing the performance of the overall market.

Why is Spotify laying off in employees in its podcast business?

In recent years, to attract more advertisers, Spotify had aggressively invested in developing its podcast business; a format that offers higher engagement levels. With rising interest rates and elevated inflation, businesses have been scaling back their ad spending. This resulted in the podcast business having operating expenditures growing at twice the rate of revenue last year.

In response to these challenges, Spotify previously downsized its workforce by 6% earlier in 2023 and saw the departure of Dawn Ostroff, a key figure in shaping the company’s podcast business. Sahar Elhabashi, the current head of Spotify’s podcast division, stated on Monday that the company has made the “difficult but necessary decision to make a strategic realignment.”

In 2020, the company had a global workforce of 8,359, according to an SEC filing.

Severance pay for Spotify employees

In Canada, non-unionized employees and executives at Spotify are owed full severance pay when they lose their jobs due to downsizing or corporate restructuring. The severance can be as much as 24 months’ pay, depending on several factors. Employees who are not provided with the full amount are entitled to compensation and should seek legal advice to ensure they are receiving what they are owed.

At Whitten & Lublin, we understand that facing job loss or termination can be a stressful and challenging experience. Our experienced employment lawyers can help you navigate your legal options and ensure that you receive the compensation you deserve. We encourage anyone affected by the recent layoffs in Canada to contact us for a consultation either online or by phone at (647) 946-1276 today.