Spotify lays off 200 employees in podcast division

The move affects about 2% of the music streaming giant's workforce, in response to an uncertain economy .

Shares of the Sweden-based company were up about 0.5% in early trading, outperforming the market.

Spotify has spent heavily to build its podcast business in recent years, hoping the higher engagement the format brings will attract more advertisers.

But that has led to an increase in the company's operating costs. Rising interest rates and high inflation mean businesses are also cutting back on advertising spending.

In response, Spotify cut 6% of its workforce by early 2023 and announced the departure of Dawn Ostroff.

Sahar Elhabashi, head of the podcast business, said Monday that the company had “made the difficult but necessary decision to implement a strategic reorganization.”

Spotify also said it will merge its Parcast and Gimlet studios into a single Spotify Studios division.

Elhabashi said the company will now take a tailored approach for each show and creator, versus the previous uniform approach.

Mai Van (according to Reuters)