Spotify ditches popular podcasts 'Heavyweight' and 'Stolen' as CEO doubles down on cost-cutting
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- Spotify is cutting two big podcasts, "Heavyweight" and "Stolen," Bloomberg reported.
- CEO Daniel Ek has his eyes firmly set on making the company "relentlessly resourceful."
- Analysts said they saw the cuts as Spotify "doubling down on its cost efficiency measures."
Spotify seems to be on a cost-cutting mission.
As Bloomberg reported Monday, two big podcasts on the platform are getting the chop.
The podcasts in question, "Heavyweight" and "Stolen," will be canceled after completing their current seasons, the report said.
Given the cancellations, the streaming giant's viral Spotify Wrapped campaign might soon be overshadowed by a new mantra: "Spotify Scrapped."
"Heavyweight" was listed as one of The New York Times' top podcasts of the year and "Stolen" won a Pulitzer Prize and Peabody Award. Both podcasts came from Spotify's Gimlet Media studio.
Evercore ISI research analysts said in a note Monday that they saw the cuts as Spotify "doubling down on its cost efficiency measures" and estimate the latest round to have produced about $300 million in annual savings for the company.
After the Stockholm-based company laid off 17% of its workforce Monday, Spotify appears to be looking for other ways to reduce costs.
The news of the podcasts' axing comes as Spotify made its third round of layoffs this year. It let go of about 600 employees in January, a further 200 in June, then about 1,500 employees on Monday.
Ek said in a Monday blog post and email to staff that the company "invested significantly" in growing its teams, content, marketing, and new verticals through 2020 and 2021.
He said: "Despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big."
In February, Mason Morfit, CEO of Spotify's activist investment firm ValueAct, told The Financial Times that the company's expenses "exploded." He said it was then beginning to sort out "what was built to last and what was built for the bubble."
Evercore ISI analysts said they don't believe Spotify's third "significant cost action" in 18 months was caused by a "deterioration in demand trends," which they say have remained "robust." Instead, they see it being driven by Ek's desire to be "relentlessly resourceful," as he said in the memo Monday.
Spotify and Prince Harry and Meghan Markle said in June they were parting ways after cutting their multi-year $20 million podcast deal short.
Spotify didn't immediately respond to Business Insider's request for comment.