Spotify announced on Monday it was laying off 2% of its workforce. File Photo by Monika Graff/UPI | License Photo
June 5 (UPI) -- Spotify announced on Monday that it will lay off about 200 employees as it aims to shake up its podcast division.
The cuts represent 2% of the audio streaming company's workforce as Sahar Elhabashi, vice president and head of content business, said it was aiming to undergo a "strategic realignment."
"As a result, we have made the difficult but necessary decision to make a strategic realignment of our group and reduce our global podcast vertical and other functions by approximately 200 people, or 2% of Spotify's workforce," Elhabashi said.
She said those impacted will be invited for one-on-one interviews with the human resources department to discuss the next step with "the utmost empathy and respect."
"The company will support these individuals with generous severance packages, including extended healthcare coverage and immediate access to outplacement support," Elhabashi said.
In the release, Spotify said it draws about 100 million listeners and has seen its podcast listenership has grow more than 1,400% since increasing its focus on producing podcasts.
In its annual report filing with the Securities and Exchange Commission, Spotify said it faces "significant competition for users, listening time, and advertisers, and we might not be successful at attracting prospective users and retaining existing users."
The company said it also faces "many risks" in connection with its international operations, including attracting, retaining, and motivating qualified personnel and obtaining rights to stream content on favorable terms.
In January, Spotify announced plans to slash about 6% of its workers as part of a drive to boost efficiency. CEO Daniel Ek said at the time that the challenging economic environment meant the company needed to cut costs, noting that growth in operational spending had been outpacing revenue growth 2-1.