Spotify, the popular music streaming service, announced on Monday that it is laying off 200 employees, or about 2% of its workforce. The layoffs are part of a companywide restructuring effort that will focus on “a more tailored partnership approach” with podcast creators, according to a memo from Spotify vice president Sahar Elhabashi.
The layoffs come as Spotify faces increasing competition from other streaming services, such as Apple Music and Amazon Music. In recent years, Spotify has also invested heavily in podcasting, acquiring several companies in the space, including Gimlet Media and The Ringer. However, the company has yet to turn a profit on its podcast business.
In her memo, Elhabashi said that the layoffs were “a difficult decision,” but that they were necessary to “ensure that we are best positioned for long-term growth and success.” She added that the company would provide severance packages and outplacement services to affected employees.
The layoffs are the latest sign of trouble in the music streaming industry. In January, Pandora, another music streaming service, announced that it was laying off 18% of its workforce. And in February, Rdio, a smaller music streaming service, shut down its operations altogether.
The music streaming industry is facing a number of challenges, including rising competition, declining music sales, and the rise of piracy. It remains to be seen whether Spotify will be able to overcome these challenges and continue to grow its business.
