Spotify will reduce total headcount by approximately 17%

https://newsroom.spotify.com/2023-12-04/an-update-on-december-2023-organizational-changes/

by filleokus • 3 years ago

627 1152 3 years ago

newsroom.spotify.com

All things considered, the note seems honest - lays out the facts and considerations. The severance package seems quite generous as well.

vsnf• 3 years ago

Written with a first-person active voice too, unlike many bureaucratic notes.

I have made the difficult decision to reduce our total headcount by approximately 17% across the company.

surgical_fire4• 3 years ago

Agreed. And the considerations they made seem to be factual too.

I think this was the first corporate notice about layoffs that didn't read like absolute bullshit.

Epa095• 3 years ago

The severance package seems quite generous as well.

I guess it depends a bit what they mean by `the average employee receiving approximately five months of severance` (and also where you are seeing it from, maybe its seen as more generous when seen from the US). In Sweeden the notice period for the employer is between 1 and 6 months, depending on how long the empoyee has worked there. If they count that period in as part of the severance package, it could wery well be "the legal minimum" or "the legal minimum + 2 months", which sounds less great than 5 months :-p

If its "the legal minimum + approximately 5 months" then it's generous.

In the other developer-downscalings I know about here in Scandinavia (Norway if it matters) the most common deal has been 6 months, either "work for the remaining notice period, then 6 months pay" or "6 months pay, you work out the current month". I say "deal", because its a deal where the employee gets that pay, and then resigns voluntarily. If they don't take the deal they only receive the legal minimum, but they can then fight the firering, which can get expensive and complicated (I have never heard about anyone not taking the deal).

thelastknowngod• 3 years ago

Yeah you're not entitled to anything in the States. There are no employment contracts and you can be fired for any reason without notice. The only reason to give severance is to avoid bad publicity. There isn't any mandate that the company has to offer anything.

There really should be though especially when the company in question was able to afford $1 billion in stock buybacks just 2 years ago, and when the CEO has a $3 billion net worth, and when they are well known for not paying their suppliers (the artists) a fair price for the content they create.

pcurve• 3 years ago

I agree, but this part bothered me.

"Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact. More people need to be focused on delivering for our key stakeholders – creators and consumers. "

While this is likely partly true, this is mostly management's fault. I didn't see anything in the email that talks post-mortem about the root cause and how it will be prevented going forward.

Tao33003• 3 years ago

too many people dedicated to supporting work and even doing work around the work

Damn, that's every job I've ever had.

thiago_fm• 3 years ago

They need a bigger cut. 17% will not have a big enough impact to its bottom line.

They need to have enough money to invest in other initiatives, as the business they are in is proven to be margin-thin.

Apple and Amazon will eventually eat Spotify given enough time, if they don't find a moat to be built

FirmwareBurner12• 3 years ago

They need a bigger cut. 17% will not have a big enough impact to its bottom line.

What's stopping them from bigger cuts? We've seen that big SW products can run on lean teams(whatsapp, post-Musk Twitter) and we know many large tech companies are overloaded with way more workers than they need to run(Google), just because they could overhire when money was free.

Apple and Amazon will eventually eat Spotify given enough time, if they don't find a moat to be built

What prevents Google from doing the same? They already have a large customer base in Android users.

csunbird• 3 years ago

Google themselves? Given the popularity of the YouTube they should have won a decade ago, but they have not.

The inefficiency of Google always amazes me.

wlesieutre• 3 years ago

Google Play Music, YouTube Music, YouTube Music Premium, YouTube Red, now YouTube Premium.

Who knows what Google’s music play will be next year? Not Google. Media is second only to Messaging for their lack of a consistent long term strategy.

fooker2• 3 years ago

For anything other than American and maybe European music, YouTube Music is so much better nowadays wrt availability. YouTube Music has stellar quality of recommendations too.

But Google could easily do a Google and sabotage the product at some point.

nova22033• 3 years ago

post-Musk Twitter

Spotify is actually trying to make money. If the goal of running Spotify was to get everyone to listen to the CEO's crappy garage band, maybe then it would be a valid comparison.

surgical_fire4• 3 years ago

Apple and Amazon will eventually eat Spotify given enough time, if they don't find a moat to be built

I doubt it.

Apple is restricted to Apple devices. As for Amazon, the same argument could be made about Prime Video eating Netflix, and that never seemed to happen.

On top of that, as far as I know, Spotify is profitable.

vlovich123• 3 years ago

Apple Music is not restricted to Apple devices afaik: https://play.google.com/store/apps/details?id=com.apple.andr...

anon234323438• 3 years ago

You can listen to apple music even via web interface and it has an android app and works on android tv and android auto.

So pretty much everywhere.

Mindwipe5• 3 years ago

Spotify had one profitable quarter by fluke. It's not profitable.

ardit332• 3 years ago

17% is a huge cut. More than that and you end up damaging operations. Look what is happening to X / Twitter.

PS. Spotify had already two layoffs, once 6% in Jan 2023 and 2% in June. This combined seems like a 25% ish cut.

rapsey6• 3 years ago

It's seeing more use than ever with a fraction of the staff?

toboche3• 3 years ago

Twitter doesn't have to pay the huge content fees as Spotify does.

konschubert2• 3 years ago

Why do they need to invest?

They can also just keep being the most complete music streaming service.

That is a low margin business, but it’s a business, and you probably don’t need a lot of people to run it.

i386• 3 years ago

Using Apple Music on a few Google devices now.

hackernewds4• 3 years ago

their moat is exploiting the copyright system with monopolistic contracts with record labels

pembrook• 3 years ago

Before trialing the iTunes franken-nightmare that is Apple Music, I would have probably agreed with you.

However, after that experience, I'm starting to think there's no way in hell a massive multi-product conglomerate like Apple/Amazon is going to overtake a single-product music streamer like Spotify.

Apple/Amazon are clearly stretched too thin, and in a worse strategic position on audio due to the way the licensing agreements shook out. In music, everybody basically has access to the same catalog on every platform.

And given that songs are 4 minutes long (vs 4 hours binging TV shows), you spend wayyy more time interacting with the software in audio vs. video. So in audio, it's purely just deciding which UI/features you like best.

Spotify seems to be trying its best to screw up the UI, but no way it ever gets as bad as Apple Music given that's their only meal ticket.

thewildginger• 3 years ago

This is an anecdote, and maybe it's just coincidental timing, but these kinds of operational choices do not work well in a company focused on a single product across multiple devices. Losing so many workers so quickly means a loss in productivity on the issues the platform has, and Spotify has many. Since November there has been an issue on PS5 where any podcast over an hour will not play on PlayStation(so, basically all podcasts). People have figured out the issue, and Spotify has not moved on it.

When you offer a single service and the benefit is being device agnostic, "cutting costs" by wasting time hiring people you probably didn't need to hire only to fire them a year or two later means an amplified disruption that will lose customers.

But hey, board members who jerk each other off once a month in a conference call who are already rich made a little more money by hiring a bunch of people only to fire them later and at a huge operational waste.

This is how our world works and it's bs.

chewz2• 3 years ago

However, after that experience, I'm starting to think there's no way in hell a massive multi-product conglomerate like Apple/Amazon is going to overtake a single-product music streamer like Spotify.

Amazon Music Unlimited is very neat experience compared to Spotify... Good catalogue (for me), better music quality and it's app is just plain, boring music player not something neurotic like Spotify...

s3p2• 3 years ago

Moat??? Spotify has the largest userbase period. Paying or non paying. Apple and Google haven’t been able to take their market share.

acdha3• 3 years ago

How much profit does Apple make versus Spotify per user? Android has had a larger user base but that hasn’t made it more profitable.

dboreham2• 3 years ago

Perhaps this cut is a precursor to being acquired by someone like Apple?

mvdtnz5• 3 years ago

I wonder how those losing their jobs feel about Spotify's reported $200 million investment in Joe Rogan now.

anon234323438• 3 years ago

It was and still is a stupid decision to buy Joe Rogan. I don't get why people listen to him... He is not funny nor smart. It sometimes feels you get better value when watching morning tv shows...

10u1522• 3 years ago

You don’t listen to Joe Rogan to listen to Joe Rogan. You listen because he has the most interesting guests on.

HideousKojima• 3 years ago

It was and still is a stupid decision to buy Joe Rogan.
I don't get why people listen to him...

I think you just contradicted yourself here. Whether or not it was a stupid decision to buy the rights to his podcast is orthogonal to whether or not he's funny or smart or if his content gives "value" to listeners.

mvdtnz5• 3 years ago

I feel neither positively nor negatively about Rogan himself (I've never listened to him) but it was plainly a very stupid investment on Spotify's part. Anyone could have predicted (and most of us did) that only a fraction of his audience would follow him behind the paywall and removing him from mainstream free outlets would instantly diminish his cultural relevance.

baby8• 3 years ago

He’s a great podcaster.

Shish2k4• 3 years ago

Are “it was a stupid decision to buy him” and “I don't get why people listen to him” supposed to be related statements? The business decision isn’t about your personal feelings, it’s about his objectively measurably enormous audience

Roritharr2• 3 years ago

Would you say that about any other type of media/culture/art you dislike?

"I don't get why people like the Mona Lisa, the painting is neither original nor particularly well done"

Is just as much a subjective statement. JRE is, by most released figures the top interview podcast on the planet, his interviews regularly move Charts of third party media like Book Bestseller Lists and Music Charts.

There obviously is a huge audience and value there and I can only assume their agreement over 200M was based on some pretty solid math.

stjohnswarts2• 3 years ago

It's simple, different people have different opinions in life and his show is still the most popular podcast on spotify. was it worth $200 million, I have my doubts on that one.

rowanG0773• 3 years ago

You don't watch Joe Rogan for Joe Rogan. You watch Joe Rogan for the guests. I love his episodes with Elon Musk.

eddtries5• 3 years ago

It’s light entertainment and he tends to cover topics I am interested in like BJJ/Muay Thai. If he goes on about Covid etc I just half listen, it’s rarely that long.

andsoitis6• 3 years ago

I don't get why people listen to him...

People have different tastes. That's OK.

The Joe Rogan Experience has continued to be at the top of Spotify's podcast charts, bringing in 11m listeners an episode. https://www.forbes.com/sites/brianbushard/2023/07/03/top-pod...

baby8• 3 years ago

I feel like you’re implying something but I don’t get it.

mvdtnz5• 3 years ago

To spell it out for you, $200 million could pay for well over 1,000 employee-years of salaries.

epistasis7• 3 years ago

The implication I see is that the $200M was not worth it.

I don't know their financials, but it seems quite unlikely that a single podcast would be worth that valuation.

rapsey6• 3 years ago

We will find out soon enough because his contract is running out.

loandbehold3• 3 years ago

Joe Rogan brings in 10s millions of listeners. On the other hand it's not clear what value those employees who were let go brought. The software behind Spotify is pretty generic. Listening experience isn't much different between say Spotify,YouTube Music and Amazon Music. Software engineers might not want to hear it, but content is more important than software used to consume it. Book vs book's cover.

mvdtnz5• 3 years ago

Joe Rogan brings in 10s millions of listeners

Has this ever been confirmed by Spotify?

epistasis7• 3 years ago

What revenue do these listeners bring?

o-alex• 3 years ago

A more suitable comparison would be between the book contents and the paper and fonts of the text. I don't know how much you would enjoy a book on bad paper and bad, barely legible text.

kevinmchugh4• 3 years ago

Many of them probably came in during the same growth wave:

In 2020 and 2021, we took advantage of the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing, and new verticals

There's no details here about which teams are effected. I imagine there's many old hands who see this as the inevitable end of an unnecessary conquer-the-world attempt

bede6• 3 years ago

As a scientist working in public health, this decision burned my faith in Spotify. They were taking down conspiracy theory podcasts daily while bankrolling Rogan to provide a platform with insane reach for cranks like Robert Malone. I cancelled my subscription for a few months in protest.

coldpie5• 3 years ago

for a few months

Heh. There's a zillion perfectly good competitors in this space. Why not just permanently switch to one that doesn't fund conspiracy theory wackos?

massysett2• 3 years ago

"for a few months" - so you went back. Honest question - what is Spotify doing so well that you went back rather than just sticking with, say, Apple Music?

slig2• 3 years ago

I cancelled my subscription for a few months in protest.

Good for you, I'm sure that made a huge impact.

starcraft2wol• 3 years ago

I feel a lot of my faith in public health scientists was also burned.

TMWNN• 3 years ago

Assuming that investing in Rogan did what Spotify hoped it would (driving enough subscriptions to make a profit), not having made the investment would have meant more layoffs now.

jzb3• 3 years ago

Opposite for me. I cancelled because of that. Partially because I didn’t like Spotify endorsing his content, but also because I subscribed to Spotify for music, not podcasts.

I wanted to see them invest more in features around music and work on better compensation for artists - not spend my subscription money on shoving podcast content at me.

madeofpalk6• 3 years ago

Why would you assume that?

yourusername• 3 years ago

At least Rogan is still one of the most popular podcasters in the world. They paid a similar ammount for Gimlet and that company is now completely defunct and all their hit podcasts either jumped ship or stopped. So that was probably a worse investment.

alecco• 3 years ago

Or $25m (2019) for two podcasts featuring the Obamas. They didn't bother to make frequent appearances and attributed the poor audience figures to Spotify's exclusive rights.

andsoitis6• 3 years ago

The Joe Rogan Experience has continued to be at the top of Spotify's podcast charts in 2023. It has the biggest weekly audience in the US (Edison Research) and is estimated to bring in 11 million listeners per episode.

It is also the top podcast worldwide on Spotify. Second place goes to Crime Junkie, which has half the listener numbers.

Source: https://www.forbes.com/sites/brianbushard/2023/07/03/top-pod...

rob742• 3 years ago

Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives.

or, otherwise said: "we fired you to make our bottom line look nicer"

TapWaterBandit• 3 years ago

Eh, what's the alternative? Some people have this weird attitude that businesses are not allowed to shrink/fail. Businesses can only ever go one direction and that is more headcount, otherwise give them govt bailout.

Businesses need to be able to grow and shrink. Otherwise we just end up with "too big to fail".

robin_reala4• 3 years ago

I don’t think the complaint was in the action, but the horrible wording.

acdha3• 3 years ago

It’s not that businesses can never shrink but that it should be considered and linked to a specific reason (e.g. a change in business strategy or consumer preferences). If they were, say, RIM a decade ago, layoffs would make sense once they had no path back into the consumer market and also were bleeding cash to the point where they soon wouldn’t be able to make payroll. When the Cold War ended, manufacturing layoffs were inevitable at some of the big defense contractors because the market for stealthy aircraft shrunk and nobody else needed to buy them.

A layoff this large means one of two things: the management screwed up on an epic scale (and should be the first to go) or it’s just giving investors a short-term stock boost at the expense of long-term success. Broad layoffs are usually bad for companies long-term because they signal both a lack of management skills and mean that everyone still working there is going to be worried about another round, so politics and making yourself harder to replace will consume a certain amount of otherwise productive time.

marcosdumay2• 3 years ago

Well, IMO they have a duty to not be frivolous on firing.

It must not be something impossible to do, but it must be hard. And they should favor most other courses of action.

But anyway, it's up to the government to enforce this, and the US (where they are hosted) seems to almost completely disagree. So we get those companies hiring like mad, just to fire like mad in a couple of years, and begin the cycle again a few years down.

surgical_fire4• 3 years ago

Er... There's nothing wrong with that. I mean, we do live in a world where businesses are supposed to be profitable. Companies hire and companies fire, that is part of the deal.

One thing is to have layoffs when you are raking in record profits. This doesn't seem to be the case. The text makes a decent enough case.

hackernewds4• 3 years ago

sure, but call a spade a spade instead of making the layoffs seem mandatory. there are inputs to financial goals - including executive greed.

chii• 3 years ago

One thing is to have layoffs when you are raking in record profits.

if the future prospects of the business doesn't look great despite the current record profits, a layoff is also not a bad decision. There's no reason why an employee is kept if that employee's work is not going to generate future profits. Current profits are already generated from past work of said employee.

make3• 3 years ago

? it's a normal capitalist corporation, what exactly did you expect

dehrmann• 3 years ago

That's not wrong, but they also hired-up for a new podcast business that wasn't as successful as they hoped.

ardit332• 3 years ago

Sad to see this happening to my former co-workers. At least it looks like the severance seems to be generous.

"We will start with a baseline for all employees, with the average employee receiving approximately five months of severance."

mtlmtlmtlmtl• 3 years ago

I often wonder what kind of work actually happens at Spotify. Pretty much every major change to the software or api since I started using it has made the product worse.

Breaking libspotify, pointless UI redesigns, obvious, user-facing bugs that go unfixed for years. Removing features like play queue for long periods. There's metadata errors and even audio corruption in some albums that I actually reported to them years ago, never fixed.

As for new features, there may be more but the only one I noticed somewhat recently was the ability to view lyrics at least for some songs, and sometimes but not always synced to the music. But this was already an add-on for Spotify wayyy back in their original client, and then they axed add-on support! This feature was gone for years after that.

I'm legitimately curious at this point what people actually do at Spotify besides billing and accounting.

that_guy_iain6• 3 years ago

I would assume it's mostly optimisation and bug fixing. Improving their ability to read files globally, improving availability, etc.

Plus internal tools will probably be a major thing too.

scarab92• 3 years ago

All the pointless redesigns was a pretty clear sign that they had excess engineering headcount.

fullshark6• 3 years ago

I saw it as a sign that they needed to find ways to get people to spend time listening to anything that is proprietary (podcasts, unique recommendation algorithms) to avoid just being the middle man for music streaming and getting squeezed by the publishers for all their revenue.

Edit: By proprietary I mean - owned by Spotify.

apwell239• 3 years ago

It wasn't pointless. Spotify's whole existence depends on moving from background listening to active foreground use.

It would be pointless for them to stay an passive background app. Might as well shutdown the company and cut the losses.

mlrtime• 3 years ago

I think this is the issue. 10,000 employees vs bad user experience.

Spotify has gotten worse for me as well, I pay for Spotify + SiriusXM. Spotify should be much better, but it's not. I'm thinking of dropping it soon.

Why doesn't Spotify still not have a Pandora style radio station? I just want to create 5 or 10 statiosn that auto pick based on certain criteria, does this exist?

prox• 3 years ago

This is why I went with Apple Music. Apple being a hardware company first makes it that they just want to provide a good portal to music. Thus far I have been happy with it.

apwell239• 3 years ago

I just want to create 5 or 10 statiosn that auto pick based on certain criteria, does this exist?

Can you describe the criteria ?

coldpie5• 3 years ago

Just try a different service. There's a zillion of them out there, all more or less interchangeable. Maybe one has the feature you want.

erellsworth3• 3 years ago

I'm not sure how specific you want your criteria to be, but you can create a Spotify "radio" station based off of any song, band/artist, or playlist. Spotify's discovery capabilities are miles beyond Pandora, in my opinion.

chinchilla2020• 3 years ago

Why doesn't Spotify still not have a Pandora style radio station? I just want to create 5 or 10 statiosn that auto pick based on certain criteria, does this exist?

Spotify does have this. They've had it forever. It automatically happens after listening to a song you like, or you can make a playlist and generate a radio off of it.

The recommendations are so far ahead of pandora it's like the difference between AIM chatbots and GPT-4. I use spotify but my boat friend uses pandora when we go out and I am astonished by how bad the matching on it is.

code_runner2• 3 years ago

even though I primarily use spotify for podcasts, the radio functionality is something I've used for like.... 8 years

delfinom2• 3 years ago

My condolences for when you try to cancel SiriusXM one day.

RamblingCTO2• 3 years ago

I still hate the change about the "add to playlist/like" button with all my heart. I don't want to like all the songs I add to playlists. I have a few hundred playlists with a looooot of songs (I listened to 86000 minutes last year of over 4000 artists ...). That change was utterly idiotic

mrWiz• 3 years ago

I've always used that button to "like" songs and used the "Add To Playlist" item under the ellipses menu to add things to a particular playlist. What was your process like before the change, and what is it now?

alephnan• 3 years ago

There was a meme about Spotify replacing the heart symbol to like a song with a ‘+’ sign.

No one asked for, it benefits no one, and people proactively want the old version.

I’m sure they had countless meetings for this “feature” and how much human hours. There would have been a designer, and a researcher. There would have also been a data scientist lying with statistics about how this change moved the core business metrics.

That’s from my personal experience of working in FANG and people doing unscientific and statistically invalid analysis of noise.

CoastalCoder2• 3 years ago

This change reminds me of Netflix replacing their 5(?)-star rating system, with a simple thumbs up / down system.

Netflix claimed there was statistical justification for the change, but my most charitable interpretation is that their goals don't align with mine.

wombat-man2• 3 years ago

I think it's a lot of small changes being a/b tested. Stuff that you might or might not notice/see. But if it passes the test it's there forever. I'd guess the general goal is to first get you to use spotify more but more importantly get you to listen to content they don't have to pay to license like podcasts and whatnot.

gizajob• 3 years ago

If you have too many UI designers, you’re going to get a lot of UI redesigns. Probably whole devs working on one button each getting laid off today and in future.

jpalawaga• 3 years ago

The start a jam and speaker sharing functionality is partly new and partly old. What is definitely new is that it works well now and doesn’t glitch out.

For better or for worse, Spotify has a lot of customized playlists. At some point, the “workout” playlist playlist stopped being a regular global playlist and started being one customized for individual users.

Their “keep playing more like this” functionality that takes over after the playlist ends is quite good, as is smart shuffle which will mix in tracks that “belong” in the playlist even.

Some songs will play artist uploaded music videos when you play their songs. Their “now playing” widget now shows a larger album art and background information about the band.

I don’t know what happened to the lyrics all of those years, but I’m guessing it was a licensing issue. A random add on is different from first party application support for all of your users, globally.

It’s possible you don’t use any of this and think it’s a waste of time. That’s fine. I think Spotify is seamlessly stitching in extra functionality in non-annoying ways, which I like.

jzb3• 3 years ago

I'm guessing there's a lot of work at Spotify that goes into anti-copying efforts, for one thing. If the API and clients behave the same way for an extended period, it gets too easy to have spotify downloaders that work reliably for a larger audience. (I realize these things exist and work, but it remains enough of a moving target to keep it from pissing off Spotify's label/music publishing partners too much.)

There's also maintenance for all their platforms, which expands a bit every year. When I first started using Spotify smart speakers weren't a thing yet, and the number of OSes and streaming devices have only increased since. They have to maintain updates for various releases of macOS, Windows, iOS, iPadOS, Roku, etc. No doubt they encounter plenty of bugs that need addressing on those platforms...

They also have to have people negotiating rights for all the regions / countries they do business in, deal with fraud, and all that nonsense.

And they have to keep up social and advertising to compete with all the other streaming music and podcasting platforms. They have editorial needs - maintaining the artist pages and all the incoming new music, building playlists, etc.

Assuming Spotify offers this info in the appropriate languages by country, that's probably not an insubstantial number of people to ensure that you have pages for each artist translated into Spanish, French, Italian, German, Chinese, Japanese, and on and on. Spotify is available in a lot of countries, if they actually offer the interface and content in half of the primary languages for those countries it's going to be a lot of work. (I doubt they attempt to translate lyrics across the board, that would be an extremely heavy lift...)

That's not to say that Spotify doesn't have some unnecessary staff, but there's probably a lot of behind-the-scenes work aside from accounting and such that people don't think about.

emodendroket6• 3 years ago

Spotify works on like a million different devices for one thing.

adamhp• 3 years ago

I don't work for and am not affiliated with Spotify in any way, but I can honestly say Spotify has added more value to my life than almost any other app I have downloaded. I have discovered so much music that I genuinely adore. It's honestly mind-boggling. I'm so excited to open up my Discover Weekly. I'm very grateful for the work that has gone into their curation of certain playlists and of the similarity scoring they are doing because my musical perspective has broadened tremendously since I regularly started listening to my Discover Weekly.

Again, sounds like I'm some secret corporate shill or something but I truly am just genuinely appreciative of the service.

dbrueck2• 3 years ago

I'm in both camps: Spotify is hands down the best ROI for me in terms of where my streaming dollars go.

OTOH, it drives me crazy that customers like myself have been begging them for many years to add basic features like remembering my spot in a playlist.

mholm• 3 years ago

I agree with you, but these features have been around for years. music radios, discover weekly, their premade mixes. Spotify has genuinely great recommendation algorithms. But they've had them the whole time. I don't know what they've been doing for the past few years, but I haven't seen any additional value add. They still don't even support Airplay 2.

cm277• 3 years ago

Same here. My Spotify Premium sub will is the last one I would give up (after Netflix, or Apple, or Google). I got thousands of hours per year listening (yes, including podcasts) and so do lots of other people I know.

Spotify is basically "audio" for hundreds of millions of people. Think about that: a single app that defines/owns one entire medium. Yet, they haven't been profitable, ever. That's the problem and should probably be fixed with regulation: to enable streaming, the music industry has made sure the streamers get a tiny slice of the value-add. Which leaves room for exactly one, barely surviving, pure audio streamer, and then a bunch of subsidized side-bets of the monsters (Apple, Amazon, Youtube).

maxverse• 3 years ago

Yeah, both are true for me. I love Spotify, and the app is getting worse. They got rid of the "make a radio from a playlist" feature, which made no sense to me - the tech is there. Instead, they're suggesting the "Enhance Playlist"/"Smart Shuffle" features, which are worse. Making radio from playlists was a major feature for me, and I really miss it. I have no idea why it's gone.

jamesblonde4• 3 years ago

You will hear more about the new term "RIF" not - reduction in force. Nobody likes to say we had layoffs, so corporate speak will be - we did a RIF ...blah blah.

It's terrible, because i love playing guitar, and they are screwing with the english language as normal people use it.

epistasis7• 3 years ago

There is a semantic difference in the terms:

In the past, layoffs typically came with an expectation that the employee might be rehired if more work became available or the employer’s financial condition improved. An RIF, on the hand, did not come with such an expectation; it usually meant that a certain position or an entire department was being eliminated. https://www.lawyers.com/legal-info/labor-employment-law/rif-...

jamesblonde4• 3 years ago

That "semantic difference" is justification for using the word, but the intent behind using RIF is the usual - water down the harshness of the thing.

I don't buy we need a new word for this. Particularly this justification is nonsense - "layoffs typically came with an expectation that the employee might be rehired if more work became available or the employer’s financial condition improved"

Who said this is true? Like say 30 years ago, IBM fired 30% of people. They didn't need to call it a RIF. Like would they re-hire the people because OS/2 took off?

that_guy_iain6• 3 years ago

Super good time to announce layoffs, at the start of the month where everyone is preparing for time off and holidays.

1letterunixname3• 3 years ago

Yep. Maximizing fuck-over of employees.

Tech workers need to stop working for corporations they don't own, aren't seeing the profits of, and who will just throw them away at any moment. The solution are businesses in the form of employee-owned co-ops and organized labor.

piyuv• 3 years ago

I’m in full support. But, you do realize the forum you’re writing this in, right?

lotsofpulp32• 3 years ago

Tech workers are one of the few W2 employees to see any profits from ownership, hence the compensation in RSUs and stock options. Also, anyone with investments in the public equity markets (like most tech workers earning high salaries) receives gains from the profits.

matchbok5• 3 years ago

Or Spotify could have not taken the risk a couple years ago and never hired them. Which is what would have happened in your scenario. (No dynamism)

Businesses take risks. Part of that includes hiring people for things that may not work out. It's really not that hard.

And "fuck-over"? Please. 5 months of salary with no work? Actual working class people would go nuts for that. Get a reality check bud.

switch0072• 3 years ago

It’s unfortunately common when financial end of year is around the same time.

Announced now, people can at least try to scale back Christmas and NYE plans if necessary.

that_guy_iain6• 3 years ago

How many people will be getting told they're part of it? I would suspect this will be hanging over their heads as an unknown element. Is it even possible for HR to manage off-boarding 17% of the company within a month?

maxehmookau3• 3 years ago

Something I'm sure their CEO will do out of kindness and solidarity. /s

How depressing.

ssnistfajen6• 3 years ago

Severance package is 5 months and Q1 will have no shortage of new job postings elsewhere. Yes this is probably not great for mental health but financially they should be fine.

that_guy_iain6• 3 years ago

Having looked at the job market, there are less job postings currently than in previous years.

While overall there will still be more jobs than qualified people to fill them. Let's not pretend like the employee market is full of people who've just been laid off from very reputable companies.

toboche3• 3 years ago

I wonder what amount of money will be saved doing these layoffs and how that compares to the overall spending of the company, given that the content streaming rights are probably a huge (the largest?) expense for the business.

ath3nd4• 3 years ago

It's about appearing efficient to the investors and therefore bumping the stock price and giving a payout to the few big stockholdets, rather than real efficiency. They go through a round of this routinely now, it seems, the letter is more or less the same as what he sent during last year, only percentages of laid off are different. That new version that ChatGPT generated made it more fluffy than last time.

If they were worried about efficiency, they would not have grossly over hired during covid. That's why we need unions.

1letterunixname3• 3 years ago

Yep. Business theater. It's about stepping on the necks of working people to suppress wages and "teach them a lesson" they probably won't learn.

toboche3• 3 years ago

That's exactly why I'm wondering about the overall improvement these layoffs will make for the business as a whole. From what this blog post is saying, it could be just applying the tactics most of the industry is following at the moment, no to stay behind the others.

jamesblonde4• 3 years ago

Why did this drop off the front page after a couple of mins? Loads of people seem interested. @dang ?

rapsey6• 3 years ago

I assume because HN keeps culture wars/political discussions down in favor of technical discussions. HN is quite heavily moderated and thank god for that.

ryanSrich2• 3 years ago

The upvote to comment ratio is off (too many comments and not enough upvotes), which is a negative signal to the HN algorithm.

xer• 3 years ago

The elephant in the room: Will Spotify survive the coming wave of generative AI audio content? Wasn't any mentioning on that in the letter.

Seems to me like they would need to ditch a lot of silly investments like original content, platform engineering on Kubernetes and scaled agile which together carry costs in the range of $100s millions, to free up resources to battle new disruptive technologies.

dvngnt_2• 3 years ago

I would think so, people want to listen to swift and drake not some ML song with no relevance.

confidantlake2• 3 years ago

Tbh I would rather listen to a ML song than drake. At least the ML song would sound less robotic.

jaymzcampbell• 3 years ago

I wonder how much of this is led by the likes of paying $200 million to sign up Joe Rogan or $25 million for Harry and Megan. That's a big chunk of change. 9,000 employees too - 17% of the workforce out the door.

wombat-man2• 3 years ago

Sure, but they’re also probably planning work for 2024. They may just figure they have more people than they need at the moment.

badcppdev2• 3 years ago

Spotify made a gamble that having some headline Podcasters would build the listener market. Podcasters release regularly and have a different potential for becoming viral compared to musicians so it's a valid commercial decision to make.

Seems like their headline gambles didn't work but googling suggests that the podcast listener market increased 10% in the last year so I think they'll probably try again.

danpalmer6• 3 years ago

Anecdotally, most of the podcasts I listen to advertise as being on Spotify, especially the ones that skew towards a more mainstream audience. I think Spotify's podcast play has largely worked to gain the mindshare, it's really just them and Apple Podcasts.

I suspect this means that Spotify subscribers are listening to plenty of podcasts, but perhaps podcasts failed to bring new listeners into Spotify.

cupofjoakim2• 3 years ago

For what it's worth Spotify is the most popular podcast platform in the US, with 25% of the userbase: https://explodingtopics.com/blog/podcast-listeners#podcast-p...

I'd say that gamble in particular worked. Not so sure others will though, audio books feels like it will be a dud.

anon234323438• 3 years ago

Spotify itself is not sustainable and going for the podcast crowed...

I still think it was not a smart move...

Its like that blue haired streamer going from twitch to what ever the msft clone of it was.

Yes Spotify is super popular but I hear more and more people moving away from it to for example apple music or other services.

They don't focus on the core anymore that much.

For example they are super late on the lossless audio train.

Yes you can hear a difference from spotify and apple music. I tested it with all my colleagues in the office. You can clearly hear that apple music or tidal sounds better then the spotify versions.

jamespo2• 3 years ago

how much difference does lossless make on the typical headphones in use with mobile devices?

TwentyPosts• 3 years ago

Were these blind tests?

gardenhedge2• 3 years ago

The Joe Rogan experience definitely worked for Both Spotify and Joe

madeofpalk6• 3 years ago

You think Spotify actually made money from it? They seem to be pulling back from Podcasts...

Neil44• 3 years ago

To put it into context 9000 workers on an average of $75000 is $675 mil a year on salaries alone, so Joe's 200 over 3 and a half years, harry and meg etc etc isn't a big a deal as it might sound. The elephant is the 9000 staff IMO.

maxglute6• 3 years ago

Should have fired 80% of their employees years ago when service was reasonably feature complete. Not that I don't sympathize with people getting laid off, but feels like past a certain point, more heads changes products faster than can be fixed, and sometimes moving fast degrades what shouldn't have been changed in the first place. NPR acquisition drama aside, pocketcast has like 25 employees that makes the service slightly better every year while fixing obvious bugs.

Sometimes I don't understand how jumping from winamp to spotify goes from a handful to 10000 employees. Winamp + audiogalaxy (ah memories) probably covers 90% of spotify use case with probably 10 engineers, then just get some suckers to curate playlists for free.

danpalmer6• 3 years ago

What do you think the employees do?

I imagine there's a big team dedicated to getting inventory on the service through negotiations with music producers around the world. You'd need to keep them to continue expanding, adding newly produced music, and re-negotiating expiring deals.

There will be a large editorial team producing playlists, curation, tuning the algorithm with expertise, etc. That all needs to be localised and to cover lots of niche music tastes. That's also not evergreen content or work, it needs constant updates to remain relevant.

Then there's international expansion and enabling the tech to work for more countries, more languages, more payment methods, more types of music publishing.

Honestly, where do you get "80%"?

maxglute6• 3 years ago

Honestly, where do you get "80%"?

Lazy hyperbole and picked pareto 80%. Not remotely well calculated remark. Should have constrained comment to engineer/design team.

madeofpalk6• 3 years ago

There's at least one team devoted to screwing up the homepage, pushing content that I don't want like podcasts. Will not miss them.

apwell239• 3 years ago

Yea I worked at groupon when it was taking off and we had around 200 sales ppl calling up and negotiating deals with local business.

Everyone back then used to ask me the same question: Why does groupon have 500 ppl, isnt' it just a wordpress site.

aerhardt• 3 years ago

I find their algorithms for recommendation (song and artist “radios”) far inferior to 2000’s Pandora, so at least in that area I agree with GP that throwing 1000 times the resources at the problem doesn’t seem to be doing anything…

mrkeen5• 3 years ago

What do you think the employees do?

Product stand-up, agile stand-up, team fika, cross-team fika, town hall, team activity, tribe activity, one-on-one, backlog grooming, team retro, incident post-mortem, ping pong, live music.

If you do scrape together a few minutes to get part of the codebase into your head (despite the open-floor-plan chatter), you've got no way to trigger that bug you think you saw.

But persevere anyway and diagnose it. Oh it looks like it's happening in someone else's microservice. File a JIRA? Bring it up at the next meeting? Try a different fix anyway. Happy with the fix? Wait in pull-request limbo until it's sorted. Release it straight into prod? You could bring down prod... Maybe you didn't really see that bug after all. Coffee time!

NickC25• 3 years ago

Spotify had a large headcount.

Let's look at some of your examples and see where things can logically be cut.

I imagine there's a big team dedicated to getting inventory on the service through negotiations with music producers around the world.

This can be streamlined considerably through standardized contracts. I'd wager 90% of the inventory that said team gets is from niche artists, independent artists or small labels. Very few artists actually have the clout or resources to negotiate their own deals with Spotify. That's sort of the point of having executives - to handle the Taylor Swifts of the world. Your local band, rapper, singer-songwriter or producer doesn't matter to Spotify.

Have a clear and straightforward tier system for compensation. You get a billion streams a year? You get $X. You get 10,000 streams a year? You get $Y.

There will be a large editorial team producing playlists, curation, tuning the algorithm with expertise, etc. That all needs to be localised and to cover lots of niche music tastes. That's also not evergreen content or work, it needs constant updates to remain relevant.

You don't need a large team to curate playlists when you can have users curate playlists. In fact, they already do. You don't need a huge localization team either. Users already take care of the legwork for you. Same goes for algorithm tuning.

Then there's international expansion and enabling the tech to work for more countries, more languages, more payment methods, more types of music publishing.

Spotify is kinda already there in terms of international expansion. Anywhere they aren't already, they probably won't get there for political reasons (such as China).

More languages? Sure, but that doesn't require a massive team. Fortunately, there are a few dominant languages around the world, and Spotify has those covered.

More payment methods? Let the creators of those methods handle that - that's their job. Credit Card companies or banks or whatever don't create their own payment platform tech and just say "now it's yours to try to implement", they have entire teams dedicated to that.

More types of music publishing? Like what? There's only so many methods of publishing music, and I'd wager there's going to be very little (if any) innovation there for a while. Spotify doesn't really distribute any other forms of published music besides digital streams. They aren't selling records or CDs, are they?

EDIT: you could also say Spotify has vastly overspent on the likes of Joe Rogan, no matter how popular he is. $200 million dollars to a company that isn't very profitable, no matter how large, is just bad business. He's worth nowhere close to $200 million.

piva006• 3 years ago

Sometimes I don't understand how jumping from winamp to spotify goes from a handful to 10000 employees. Winamp + audiogalaxy (ah memories) probably covers 90% of spotify use case with probably 10 engineers, then just get some suckers to curate playlists for free.

The complexity is not the player, it's the whole business... Winamp didn't have recommendations, tack on another 100-200 people working on data to surface those. There are close to a 100 markets being offered content with licencing deals, each with different regulations.

There are internal platforms, infrastructure, development, each platform requires team(s) to maintain, and develop them.

What's the size of the largest tech company (with a single product) that you've worked at? Just so I know how to translate how larger organisations work to a worldview that you have experience with.

maxglute6• 3 years ago

No need, I was being flippant. I don't work in tech but dealt with large orgs. Broad point is, by all means, have your headcount for signing labels, localization, maintaining physical infra. But past a certain amount of brains and you get feature/vision creep that starts degrading core product. Where/when that point is of course highly subjective.

But how many employees does a music streaming service need? I don't know, but last I read, Valve had less than 500 employees on everything including Steam before they ramp up headcount for hardware. Did spotify need 20x more? Maybe nature of music streaming needs 9000 more employees to deal with labels. But my uninformed opinion is, probably not.

butlike6• 3 years ago

Those were the days. Winamp. The tiny media player that booted instantly, had such a low fingerprint you could safely have it playing while gaming. The media player you could re-skin. You could later hook into lastfm to "scrobble" your listens if you wanted them to persist after a WinXP reinstall.

tarsinge• 3 years ago

If a company needs to fire people to prevent a product from degrading then it’s too late the company culture is rotten to its core.

Ajay-p• 3 years ago

When startups receive huge waves of investor cash it can seem like the runway is forever. Look at Twitter which had far more employees than it needed. When the cash seems infinite there may be a tendency to forget the principle of staying lean.

acjohnson554• 3 years ago

At every company I've worked at, there are things we want to do that nearly everybody think are a good idea. But we can't do them all, because we have limited capital. So we have to be very strategic.

Spotify has developed a huge surface area, because they are attempting to be the one-stop shop for all things audio. The thesis is that the whole is greater than the sum of the parts, and that's what they're selling to investors. That means there are countless bets they could be making at any one time, to compete with everybody else out there.

For a company of Spotify's stature, when capital is cheap, they can raise the money to do all the things, all at once. They don't have to make prioritization choices. Usually this means many dozens of teams, which each seem pretty lean if you zoom in. Like, I'm guessing there's a team of 3ish developing the in-app lyrics experience, or something like that. The scale is in how many of these bets are going at once.

The capital markets have changed, and now Spotify (like many others) has to constrain its bets. The thesis hasn't changed, but their capacity to try to prove it out isn't as limitless as before.

varjag2• 3 years ago

10000 employees with let's say 40% overhead translates into 2000 3-ish lean teams. Certainly some would be far larger than 3 person but even then. Is Spotify surface that huge really?

esskay• 3 years ago

they are attempting to be the one-stop shop for all things audio

The only problem with that approach is they now have a huge number of half baked or broken features. It's infuriating as hell when you spot a bug or something not working as expected only to find a post on their community dating back close to a decade, with thousands of people confirming the issue and someone from their team repeatedly replying with a vague message about passing it on to the team.

Spotify's development has somehow been run at a snails pace even with their huge headcount.

StevePerkins• 3 years ago

I don't think the question is whether Spotify should or shouldn't persue podcasts and audiobooks in addition to music streaming.

The question is whether any organization really needs 5-20k tech workers for an audio app. Even one that plays music, podcasts, and books. I would be slack jawed with shock if the Apple team that works on their podcasts app, and the Amazon team that works on their Audible app, COMBINED were a meaningful fraction of that scale.

And it's certainly fair game to question why they don't have more resources allocated to longstanding issues with the core product. Especially given that the core product hasn't noticeably changed much in years.

digger4952• 3 years ago

there are things we want to do that nearly everybody think are a good idea.

They aren't a good idea. Almost always. For example, "lets put podcasts in spotify". Not a single person I know wanted podcasts in spotify.

yibg• 3 years ago

No idea where the 80% or 90% coverage comes from, but let’s assume the numbers are right and you get 90% with just 20% of the current staff. Spotify has revenue of 13 billion a year. 10% of that is a bit more than a billion. Spotify has 9000 - 10000 employees, let’s round up and say 10,000 employees. If they can get an extra 1 billion at a cost of 8,000 employees it still might be worth it if they can spend 100k per employee per year. Doable for a mix of roles and geographies.

At some scales of business, spending a lot more to get incremental gains can be worth it.

Solvency4• 3 years ago

What in the absolute fuck are 10000 people doing at Spotify? Really try to crunch those numbers mentally here. It's insane.

miyuru• 3 years ago

Spotify also has studios in multiple locations.

https://spotifystudios.com/

bittermandel• 3 years ago

Interesting timing considering the on-going process of unionizing.

u3202• 3 years ago

I don't see how it's related. If anything this will accelerate that.

benterix• 3 years ago

This is one bit I don't understand. You either unionize or don't. If you do, you do it fast or you lose it.

All management hates unions, and especially the management of SV companies. They will do everything to crush it. So you either do it fast or lose employees as the management will attack first.

occz4• 3 years ago

It will be interesting to see whether this reinvigorates the unionization push that followed the layoffs early this year.

pdimitar10• 3 years ago

But why do they have so many in the first place?

9000 employees. My gods.

What are all these people doing?!

izacus7• 3 years ago

Maintaining a large worldwide music/podcast delivery platform. What do you think they're doing?

steve19772• 3 years ago

Not OP, but I really don’t know why you would need that many people.

sligor2• 3 years ago

Well, whatsapp reached 1 billion user with only around 50 employees

Maxion• 3 years ago

Clearly not working on the core functionality of the app - heh.

This seems to be some megatrend with the big tech companies. Hire on ~10k staff, ignore your core features, ???, profit.

pdimitar10• 3 years ago

I mean, yeah. How many engineers do you need? 5-6 for the backend, 3-4 DevOps, maybe some more for the various frontends... say, 20?

I can't imagine the whole thing can't be done with between 30 to 50 engineers in total.

And everyone else, what do they do? Cold calls to the entire planet to go subscribe, or what? Also alright, some lawyers and "compliance" people, financiers, marketers,...

Don't know. I'd struggle to fill a roster of 200 people for Spotify.

Clearly not working on the core functionality of the app - heh.

Sadly, yes. That they become so tone-deaf is something I'll never condone though I do understand why it's happening (or so I think: is it the gobs of money that make people comfortable and disconnected from the bread and butter of the company?)

c-fe• 3 years ago

exactly 0 engineers working on the stupid "enhanced shuffle" or whatever its called that I am forced to toggle through in order to switch between shuffle and non-shuffle, and makes me wait 5 seconds while adding random songs to my liked songs that I dont want and did not ask for. The amount of computing resources wasted on this trash is just insane, both on the backend for the song recommendations and on the frontend where my phone is frozen for 5 seconds. It escapes me how such a big company is fine with having that this abomination of a feature in their app. rant over

sigilis• 3 years ago

In addition to the technical work of keeping the servers running and the infra reliable, there is probably a great deal of work getting content licensing deals, working on marketing, managing the whole edifice, and stuff like that. They need a huge number of content “suppliers” to get basically every song in every country. They undoubtedly have a large number of developers working on apps for every platform, keeping up with all that attendant complexity.

On top of that, the company wants to innovate and probably has teams working on hardware and whatnot.

Whether it’s efficient is not clear, but most people there probably work hard on their particular daily grind.

snoopsnopp• 3 years ago

When I was junior I used to buy this explanation, but 9,000 developers is probably more then are actually working on huge projects like Linux or .NET it’s approx 100 times more developers then you’d ever reasonably hire. It’s just for financial reasons it’s cheap to double up of devs instead of giving raises

happytiger3• 3 years ago

Maybe. But for perspective it’s approximately 1/40th of the number of people that were employed at the peak of the Apollo moon landing missions (400,000 people) and that required the support of over 20,000 firms and universities.

It’s a LOT of humans for streaming music service.

michaelt5• 3 years ago

They undoubtedly have a large number of developers working on apps for every platform

Yes, if they were at the cutting edge on every platform and constantly adding innovative new features, that could certainly explain 500 of the 9000 employees.

But that still leaves 8,500 employees unexplained.

lijok3• 3 years ago

What are all these people doing?!

Ensuring Spotify can smoothly operate globally

pdimitar10• 3 years ago

I can accept that... if it's said how exactly.

n_ary2• 3 years ago

9000 employees. My gods.

These are probably not all devs/engineers. Usually, selling services/products in multiple countries mean, dedicated legal, HR, accounting replicated in nearly every location where no common treaty exists, and management in large tech tends to have too many levels and adds up quickly as well.

bottled_poe• 3 years ago

“probably”? I mean, yes it’s a tech company, but it’s a bit surprising anyone would expect it to be much more than 50% engineering. Marketing and customer support alone would have a huge headcount - and given the impact AI tech is having on those areas, I wouldn’t be surprised if they represented a disproportionate fraction of the layoffs.

figassis• 3 years ago

Each feature, integration (maybe with each publisher), country, etc is likely its own microsservice and infra and devops and team.

poisonborz2• 3 years ago

This is the only valid question here. Bloated workforce is somehow a must-have byproduct of growing cash flow, someone could surely say why. Is it prestige? Is it managers gaining more power by commanding more teams and this workforce then remains? Is it to please shareholders with feature bloat? Is it an actual (one-time?) need to scale up globally?

I hate Xitter like the next guy, but if there is one thing Musk made right is to show you can axe most of the staff of an established platform and you can still have a running global scale operation (ignoring some early downtimes/hiccups and all other, khm, content-related issues). It seems currently they have around 600 full-time engineers.

izacus7• 3 years ago

I hate Xitter like the next guy, but if there is one thing Musk made right is to show you can axe most of the staff of an established platform and you can still have a running global scale operation (ignoring some early downtimes/hiccups and all other, khm, content-related issues). It seems currently they have around 600 full-time engineers.

Xitter is massively tanking as a company with massive revenue losses since that brilliant idea. Its example proves literally the opposite of what you're claiming - after firings the company is in tailspin of financial losses.

semi-extrinsic• 3 years ago

Absolutely feel bad for the people that are being let go in today's economy.

When it comes to Spotify in particular, I use it almost daily and I can't say that I've noticed any new features in the past two-three years, other than some semi-confusing reshuffle of where stuff is listed on the home page. Feels like it is an app that is well and truly in maintenance mode - it just does what it says on the tin, with extremely good market penetration.

So genuine non-facetious question as an outsider, what are the people working on? Does it take this many people to operate an app on the scale of Spotify, are there lots of people developing new features that never make it into prod, or is it something else that I haven't thought about?

For comparison the Jet Propulsion Laboratory has around 7000 employees, and they develop and operate multiple Mars rovers, several space telescopes, a whole range satellites and space probes, etc.

Maybe that's a bad comparison, but if so, why?

dustedcodes2• 3 years ago

I have never had Spotify and would like to understand what people like about it?

Admittedly I pay for YouTube Premium which comes with YouTube Music, so I use that for music. YouTube is kind of an integral part of life I find, everybody uses it. It has so much useful content, it has educational content, product reviews, how to guides, and then of course all the entertainment content. So assuming that probably most people subscribe to YouTube Premium, why Spotify as well?

Where do people have all that time for listening to all those podcasts which Spotify buys to lurk people onto their platform? I don't even have time for Netflix, let alone listening to some podcasts. Time taken up by my work, then my hobby projects, playing sports, playing with my child and spending time with my wife, meeting friends and family on our weekends, going outdoors with the kids or just for us to do something in the real world, cooking fresh food every day, doing regular house work and so forth, where is the time left to binge watch one Netflix series after another or to listen to these podcasts?

Even when I was single and didn't have wife and child I didn't have time for these things. In fact I had even less time because I did even more sports, went clubbing, house parties, dating women, going abroad with friends, etc. was even more time consuming than having a stable family now.

This is not criticism, but genuinely asking, do people who subscribe to those services do anything else in their life or are they just transitioning from Spotify to work to Netflix to bed to Spotify to work to Netflix to bed to... ???

rapsey6• 3 years ago

I listen to podcasts: While doing pretty much anything in the house, while driving. Turns out that is a pretty sizeable chunk of time.

syrgian• 3 years ago

Not Spotify, but I pay for Amazon Music. I listen music all the time, and it also works for 5 of my family members (out of which 1 listens a lot and the rest listen a little). It's cheaper than Youtube Premium and has better quality as far as I can tell.

I don't listen to podcasts, but I know people listen to them in during their commute.

In fact, I am surprised someone with kids and little free time considers Youtube an integral part of life. I watch an average of 2 videos a week, usually skipping most of them. Mostly DIY guides.

Maybe I will subscribe once my kids are in age to watch educational videos, but even then, I am pretty sure I will prefer Curiosity Stream, which I trust waaay more than Youtube for kid-friendly content.

dustedcodes2• 3 years ago

In fact, I am surprised someone with kids and little free time considers Youtube an integral part of life.

Nursery rhymes on YouTube Premium are a blessing. When we were trying to teach my daughter to eat solids we struggled until we played compilation videos of other babies eating really well and then my daughter started to try to copy them. This was a blessing for the first child who doesn't have an older sibling to copy from. So many other useful scenarios where YouTube really helps.

Then of course all the other content. I love watching people doing reviews of products. For example, last Black Friday we bought an Air Fryer and I wanted to know what is the practical difference between the Ninja Dual drawer and single large drawer with divider. Like I'm already sold on buying a Ninja, just need to know which model and those YouTube videos are fantastic to do this kind of research. Same thign when I bought an expensive coffee machine and the brand had 3 different models which were very similar but with minor crucial differences.

Then of course there are all the podcasts on YouTube as well. I mean if I wanted to listen to Joe Rogan there is no shortage of him on YouTube for instance.

I love that YouTube also has sooooooo much other amazing content. Only 5 days ago when I was cooking in the evening I was rewatching an entire Tennis match, one of the classics between Andy Murray and Roger Federer. It's all on YouTube in high-res. Where else do I get so much value for money? It's definitely integral to our life. YouTube has it all.

bobdvb• 3 years ago

I probably watch more YouTube than SVOD (e.g. Netflix).

Plus the family sub for YT Premium is well worth it. But I do sub to Amazon Music not Spotify because of Alexa.

troupo• 3 years ago

So assuming that probably most people subscribe to YouTube Premium, why Spotify as well?

Because I don't listen to "educational content, product reviews, how to guides" all the time?

I listen to music, and at its core Spotify is still a music streaming service. And between discover weekly, dj, curated playlists, my own playlists and user-created playlists there are significantly more ways to find the music you want, and not the bullshit non-working search that Youtube has.

madeofpalk6• 3 years ago

So assuming that probably most people subscribe to YouTube Premium

Why would you assume this?

goodluckchuck• 3 years ago

There were 1,600 people at Spotify?

amatix• 3 years ago

Spotify reported that it had 9,400 employees at the end of the third quarter of 2023. It had already cut back employee numbers by 6% in January and by a further 2% in June.

sho_hn2• 3 years ago

I'm also curious what they need 10k people for. What of the business is so labor-intensive?

osobo• 3 years ago

I wonder what they were all doing. Their special apps, like the iWatch, are below par and they are pretty much the last service that doesn't offer HQ audio. AI does most of the editorial playlist generation. What are nearly 10K people doing?

blooop• 3 years ago

From the article:

Spotify reported that it had 9,400 employees at the end of the third quarter of 2023. It had already cut back employee numbers by 6% in January and by a further 2% in June.

mahmoudhossam• 3 years ago

This isn't about rising costs though, this is about the labels and shareholders being greedy and wanting an even bigger piece of the cake that is already massive.

Meanwhile artists are getting paid next to nothing and now even workers are getting the short end of the stick.

deburo• 3 years ago

Are you not aware how dire inflation and the very high interest rate make the current situation?

WUMBOWUMBO• 3 years ago

Hasn't inflation gone down to ~3%?

deelowe5• 3 years ago

I see this response a lot on these threads. Why is it so hard to accept that two digit inflation over the past couple of years and interest rates well above 5% could be a major factor?

myspy4• 3 years ago

Well how about thinking stakeholders first and shareholders second?

Firing your employees because you are incompetent leadership and management without good foresight should result in letting you go.

Why the high compensation for leadership when it doesn‘t know what it does?

Braun didn‘t get the design leader in the past because they threw out their team, they got there because they kept the team together. The more you learn the better for the company.

This goes for all tech related job cutting in the last months.

lotsofpulp32• 3 years ago

This isn't about rising costs though, this is about the labels and shareholders being greedy and wanting an even bigger piece of the cake that is already massive.

Source? Because losing money every year does not seem sustainable.

https://www.macrotrends.net/stocks/charts/SPOT/spotify-techn...

danielmarkbruce6• 3 years ago

Have you looked at the financials? The company runs net losses, every year. Losses are not a "massive cake", they are a "massive hole".

saaaaaam• 3 years ago

The labels are definitely getting a massive slice of the cake - and recently pushed for more.

FirmwareBurner12• 3 years ago

Looks like Benn Jordan's analysis on how Spotify will fail is slowly starting to materialize:

https://www.youtube.com/watch?v=gDfNRWsMRsU

jorlow• 3 years ago

Would love a tl;dw. How does he predict the fail will materialize?

FirmwareBurner12• 3 years ago

Here's what Bard says:

"The video starts by talking about how Spotify has become the dominant force in the music industry. In 2018, Spotify had over 200 million users and was paying out over $5 billion in royalties to artists. However, the video also points out that Spotify is not a very profitable company. In fact, Spotify has lost money every year since it was founded in 2006.

So, how does Spotify make money? The answer is that Spotify makes money by selling advertising. In 2018, Spotify generated over $1.2 billion in advertising revenue. This means that Spotify is essentially a media company that just happens to also offer music streaming.

The video also discusses the impact of streaming on artists. On the one hand, streaming has made it easier for people to discover new music. This can be a good thing for artists, as it can help them to reach a wider audience. On the other hand, streaming has also led to a decline in album sales. This is because people are no longer willing to pay $10 or $20 for an album when they can stream it for free on Spotify.

As a result of this, many artists are now struggling to make a living from their music. In fact, a study by the Berklee College of Music found that the median income for a full-time musician in the United States is just $20,000 per year.

So, what does the future hold for the music industry? The video argues that the music industry is in a state of flux. It is unclear how artists will be able to make a living in the future, and it is also unclear how Spotify will be able to continue to grow its business."

hyperbovine• 3 years ago

I didn't watch either, but judging from the comments, it's the usual story: they are completely beholden to record companies, who own rights to nearly all of their catalog. Thus most of their revenue goes straight back out the door as royalties. Moreover, the recording companies can raise the rates pretty much at-will, which apparently they have done upon seeing Spotify starting to make a bit more money.

That is why Spotify are desperately trying to produce their own content, most notably in the podcast space, and I suspect why they also recently branched out into audiobooks, as every hour spent listening to an audiobook displaces a dozen or so royalty-generating song plays.

konart• 3 years ago

https://www.summarize.tech/www.youtube.com/watch?v=gDfNRWsMR...

For those against clicking:

00:00:00 - 00:15:00

The author of the video argues that Spotify will ultimately fail due to the high cost of membership, the fact that streaming services pay independent musicians less than traditional music platforms, and the company's neglect of its only asset - its artists.

00:00:00 The author of the video argues that Spotify will ultimately fail because of the high cost of membership and the fact that streaming services pay independent musicians less than traditional music platforms.

00:05:00 The author of the video makes the case that Spotify will eventually fail because of its business model, which relies on rapid growth and unsustainable levels of value in the music industry. He argues that if Spotify's independent musicians were paid more fairly, the platform would be unable to survive.

00:10:00 The author of the video argues that Spotify will eventually fail due to the company's neglect of its only asset - its artists. The author believes that this neglect will lead to the eventual collapse of the streaming music industry as a whole. However, he also believes that this collapse will be hastened by the fact that for-profit companies are required to eventually pay their investors as little as possible.

00:15:00 The author of this video argues that streaming services like Spotify will ultimately fail because they rely on artificial scarcity (i.e. the notion that there are not enough songs available to listen to on the platform). They suggest that instead of using streaming services, musicians should focus on releasing their music on their own platforms, such as Bandcamp or their own website.

hasoleju• 3 years ago

I'm a heavy user of spotify. Almost everyone I know uses it daily. I don't understand why they are not able to turn this much engagement into profit.

glimshe• 3 years ago

They are likely not charging enough for their costs. A lot of unsustainable businesses are like that. Users love it because of the low prices and high perceived value - think Uber.

capableweb4• 3 years ago

Spotify is a public for-profit company with shareholders, the purpose of their organization is not to make profit so they can redistribute it, but to increase the share value as much as possible in order for the shareholders to benefit. Sometimes that means that they need to increase profits, but not always, there are other ways to increase the share value besides profits.

gumballindie3• 3 years ago

Almost everyone I know uses it daily.

Counterpoint: almost no one I know uses it. It was fun at first but became boring fast, a bit like Netflix. If I want to listen to music I use youtube.

Kbelicius• 3 years ago

I don't understand why they are not able to turn this much engagement into profit.

Because any growth in profits that spotify sees will quickly be eaten by music rights holders.

infecto• 3 years ago

I am a cynic here but part of me feels that with such low interest rates for so long, a lot of companies in tech could ignore profitability so long as they were hitting that MAU and related targets.

realusername• 3 years ago

I don't understand why they are not able to turn this much engagement into profit.

They will never be able to, regardless of how much they pricing the platform, the music majors will renegotiate and ask all of their profits.

bazmattaz2• 3 years ago

A huge amount of revenue goes into paying royalties

mseidl• 3 years ago

There was another musician that went on his own, but his overall sales are less but he's making more.

Also the fucking music industry sucks.

I also used to work for a company that used to have a streaming service and they paid like over 20 million alone just to the record industry.

nalekberov• 3 years ago

A few days ago I received "Pay one month, get 3 months" promotion (disclaimer: Accepted). That explains the picture.

rodlette• 3 years ago

I'm embarrassed to admit that despite having had Spotify for years, my music tastes didn't change much.

I switched back to albums, and can thankfully pick clients that suit my taste.

* https://gitlab.com/souch/SMP for Android

* https://apps.gnome.org/Amberol/ for desktop Linux

Beets and rsync manage tags and distribution.

oblio5• 3 years ago

I'm embarrassed to admit that despite having had Spotify for years, my music tastes didn't change much.

Don't be embarrassed, that's probably most people.

We like what we like.

ghaff7• 3 years ago

Napster and, later, streaming caused me to experiment a bit more. But although I picked up various artists and genres over the years I'm still pretty rooted in what I liked during college and early adult years. If my access to streaming were cut off tomorrow, I'd be pretty content with my mostly ripped from CD music library.

bluesounddirect• 3 years ago

Finally.

byyll3• 3 years ago

Can someone explain to me why a company that is about streaming mp3s needs 9500 employees? That just sounds extremely inefficient to me. They don't even have native desktop apps.

elAhmo• 3 years ago

They definitely don't need that many, hence the layoffs.

FirmwareBurner12• 3 years ago

All of these hp tech start-ups/scale-ups overhired when money was cheap to signal growth and confidence to investors, even if they didn't need that many workers, nobody cared, as long as "line goes up".

lupire2• 3 years ago

This is nonsense. They hired people to grow users, usage revenue, not to brag about employee counts. Companies brag about maximizes revenue per employee.

oblio5• 3 years ago

Well, this is another version of the classic "I could build this in an weekend" trope.

9500 is probably excessive, but think of it just this way:

1. Spotify has a worldwide presence, apparently 184 markets; that probably entails a legal presence in many of those jurisdictions, sales, marketing, support, localization, etc.; at a conservative 2 persons per market, just that's going to generate about 400 jobs; now, most of those markets will be grouped up but the big ones will probably have tens if not hundreds of people dedicated to that market (the US is likely to have hundreds of people supporting it, for example).

2. Spotify has to build, update, maintain, extend, etc a global infrastructure. Just the ops team for that has to cover 3x 8h shifts to make it 24/7. Each region should have at least 3 people in it, for high support availability. That's 9 people right there, and it would be crazy to support ~550 million active users with 9 people, they probably have 10 times that many people and teams supporting various components. So just an ops team of 100 is perfectly reasonable.

3. Then they need a dev team. They have... ads, various integrations, songs, audiobooks, podcasts, their apps or whatever are available on smart TVs, web, cars, bla bla bla, if it's 10 people for each client, that would probably mean at least 50 people. And 10 people per client is probably silly low, make that at least 100-200.

4. Then they have a bunch of backend services, probably a lot of them. Plop another 5-10 people for each service. That's going to be many more hundreds of people.

5. Then they have actual R&D, where they're exploring stuff. This depends on the company, but for a company that's still clarifying its business model, having 100 people researching stuff sounds reasonable.

That's ~1500 people just from me eyeballing their business. 9500 is maybe on the high side, but considering their scale, if we dig deep enough into their business model, probably 5000 is perfectly fine.

These services are crazy complex and "streaming mp3s" is a very reductive view.

k2xl• 3 years ago

I like the way you broke thid down.

schnable• 3 years ago

Plus it’s a two sided market - most of that needs to be created and operated for consumer and producer side, and all the systems linking them between.

ghaff7• 3 years ago

And to factor in some of the other commentary--they could build this in a weekend (and continue to operate it for relative pennies) on-prem.

tibbydudeza• 3 years ago

Spotify does awesome music recommendation - there are no human curation involved like with Apple Music afaik - you probably need a whole bunch of people for this.

They do much more than merely streaming mp3's and they working on a video product as well - there is some content creation as well i.e agents , sales , marketing and producers.

You can probably can compare them to Netflix (12,800).

mynegation• 3 years ago

That, and people often forget that - even if we stay on the engineering side of things - Spotify has tools and apps for artists, creators, and advertisers that most users never see.

mrweasel3• 3 years ago

While I think you're low on the legal/sales/marketing and so on, your estimates does trigger the question: How much easier/cheaper and profitable would it be to run Spotify as a purely stream music platform.

Lose the ads, audiobooks, podcasts, drop any platform that isn't iOS, Android or web. Would that be profitable, or would people not want to buy the service?

byyll3• 3 years ago

I certainly couldn't build that in a weekend but nor would I need 9500 people. Keep in mind WhatsApp was running with 50 engineers in 2015 when it had 900 million users. Last year, according to some sources, it had 3000 employees and 2.4 billion users. And that's groups, voice messages, video and voice calls, WhatsApp for business, integrations and a lot more.

Some of these seem reasonable, some not. There is no need for legal presence everywhere or to even have a permanent hire for that. The many clients make sense (including consoles too) but more than 10 people per client? It's not the most complicated app. R&D I guess makes sense too.

Actually, it would be interesting to see the breakdown of employees by category.

Regardless, I think the answer lies somewhere between what you said (unknown at a glance costs) and what others have said - too many managers managing managers and overhiring.

selfmodruntime3• 3 years ago

I'm wondering what it is that they're doing all day. The spotify app randomly changes, and if so, rarely for the better. I'd wager spotify could benefit from X' style layoffs.

dieortin• 3 years ago

With “X’ style” meaning “handled in the worst possible way”?

kranke1553• 3 years ago

The X layoffs are too soon to make a judgement call on, look at the advertiser fight X is involved in now. Its up in the air if they kept enough people to make advertisers happy or moderation. Moderation has become a real problem on X, Ive sent reports that were clearly a problematic account, sometimes even fake accounts that are stealing identities, and the X UI sends me a message saying "nah all good"

CalRobert• 3 years ago

It hardly whips the llama's ass.

zerr• 3 years ago

Overhiring is the most important factor for manager promotions, unfortunately.

candiddevmike• 3 years ago

More and more it seems they're an advertising company that also serves music and podcasts. I keep seeing sponsored recommendations and I'm a premium subscriber, for now.

kibwen2• 3 years ago

Seemingly every company in the "tech" industry is just an advertising company shambling around in the rotten skin-suit of a legitimate business.

kenhwang3• 3 years ago

Agreed, they're spending a lot of effort to be better at pushing "recommendations": the DJ, "smart" shuffle, the new home screen UI that prioritizes recommended new releases, concerts, and merchandise.

Those are all ad slots. They want artists to pay to be included in those in the future.

thomastjeffery4• 3 years ago

The magic word is "growth".

For context, I find this artist's explanation of the situation helpful: https://www.youtube.com/watch?v=gDfNRWsMRsU

lupire2• 3 years ago

That's why Spotify fails artists, and wishful thinking for a replacement.

In the OS world, it would be "why Microsoft will ultimately fail".

byyll3• 3 years ago

Interesting video, thank you.

nemo44x4• 3 years ago

Because managers that manage managers need more people to justify hiring more managers.

tootie2• 3 years ago

I doubt even half their staff is product development. Acquiring and licensing content is very complicated. Marketing, advertising and operations. Their entire podcast stack includes not only end-user experience, they own multiple podcast production and analytics tools (via acquisition of Megaphone, Anchor, Chartable) not to mention their in-house production via stuff like Gimlet.

stemlord• 3 years ago

I could understand so many employees for seemingly simple-ish tech services like this if 9000 of them are working in the customer support / tech support department. Wishful thinking though I guess.

redwood• 3 years ago

They are doing a lot, including open source. Out of curiosity is anyone using Backstage at their place of work for developer portal? Is it providing value? Should Spotify double down on that?

realraghavgupta• 3 years ago

Yes, it is being used at my place of work. Extensive work is being done internally to make it the portal to everything a developer needs. Its definitely a great product and more work should be done. Spinning it off into its own entity would not be a bad idea, if they can deliver a lot and introduce a good SaaS pricing around it, with prices that should be comparable to what self hosting it in a kubernetes cluster would normally be, and not something what most companies are doing.

empiricus• 3 years ago

Meanwhile I cannot see anywhere what is the streaming quality for Spotify on my Samsung TV. Please put a text label somewhere in the currently empty settings page. It should take 1h of programmer time. Granted, if what I suspect is true, i.e. the streaming data rate is too small (not configurable), then I might switch to a different streaming app :)

dijit10• 3 years ago

Reminds me of: "Nobody ever got fired for buying cloud".

Spotify was a stand-out, almost no large tech company bought into cloud like they did, and everyone said the same thing: "It's not our core competence, it would require more people".

I get it, it's not sexy at all to deal in infrastructure, but I've seen their cloud bill and it's significantly higher than 1,600 peoples jobs, even with the discounts they got through committed use and even when considering the actual costs for infrastructure they need.

I'm sure there are inefficiencies everywhere, but this was the one that I talked about before and was talked down in a rather condescending tone. "Nobody got fired for buying cloud" is evidently a misnomer, because if you spend a lot of money and you don't have a lot of income: something has to give. And cloud has a lot more lock-in than most employees.

kranke1553• 3 years ago

How big is the difference in your estimate, between the bills they have now vs cost of cloud + staff to support it?

dijit10• 3 years ago

Largely depends.

For ML workloads anything between 6-8x cost increase for using cloud.

For CDN costs somewhere like 3x (they're pretty smart on discounts here, without those it could be 100's of x)

For compute somewhere like 3-4x (would be 6x before the discounts)

Managed DB is a hard one because the cost is really high but I'm not 100% sure how much time is saved with the solution they chose because while I saw the bill I don't work there.

It gets dicey with humans because it's apples to oranges, expensive SRE's who understand the inner-workings of cloud vs cheap(er) hardware folks who set things up from first principles with a higher up-front cost. -- FinOps with more traditional solutions is easier but you still need people for that.

Spotify's backend load is not entirely elastic. There are some elastic bits but a large chunk is pretty static.

blcknight• 3 years ago

Finding people who can run infra at Spotify scale isn’t easy. Even if they could find those people, it tough to leave aws (by design).

They could’ve been more careful about avoiding lock-in by building more on something like kube but most startups don’t have that foresight, and the expense of moving to on-prem is compounded even more when they have so much wrapped up in the aws ecosystem.

dijit10• 3 years ago

They've already managed a switch from AWS to Google Cloud once in their past.

mrweasel3• 3 years ago

Finding people who can run infra at Spotify scale isn’t easy.

You won't get any argument from me on that one, but it's worth remembering that it's also hard to find people who are able to run systems in the cloud cost effectively.

shiftpgdn• 3 years ago

TikTok found all of those people very quickly, they famously don't use a public cloud provider. Infra isn't magic.

ctvo5• 3 years ago

Where in the article did you see cloud costs being the reason for this layoff?

Spotify is cutting almost 1,600 jobs as the music streaming service blamed a slowing economy and higher borrowing costs in the latest round of redundancies at big tech companies.

It clearly states later that in a zero interest environment Spotify borrowed heavily and over hired, in this environment it’s no longer sustainable and they had to let employees go.

Did you just assume “costs” meant infrastructure costs like cloud?

dijit10• 3 years ago

Cost's don't exist in a vacuum.

it's easier to lay people off than to save millions in cloud spending when you've already committed to $x-billion over 5 years.

cedws2• 3 years ago

This is why I'm bullish about Oxide (who are building hardware to make it easy to essentially run your own cloud.) Nobody wants to deal with the nasty parts of running servers but if a company can take some of that complexity away, you could save a tonne of money over AWS.

notRobot• 3 years ago

How is running your own cloud different than traditional bare metal?

throwaw122• 3 years ago

Spotify was a stand-out, almost no large tech company bought into cloud like they did

Isn't this what made Spotify success? Yes, they could have build their own datacenters, but someone else could outcompete them in the meantime.

They have traded off something for another thing.

philistine• 3 years ago

I don't think one of you has to be wrong for another one to be right. Should Spotify have focused on its core competency early in its life? Sure. But at some point in the long years since, Spotify should have 100% looked at their cloud bills and built a way out of that lock-in.

dijit10• 3 years ago

I think that's a good take, it's easy to look in hindsight and say that they made wrong choices but we wouldn't even be having the conversation had they not been at least somewhat successful.

The question becomes then: 9,500 employee's and none among them know how (or wanted) to regain enough costs to save 17% of the company from losing their job just before Christmas?

Certain features (spotify wrapped for example) would definitely be a lot harder with more traditional hosting. But the bulk of Spotify's workload are not significantly hampered by moving slower on infrastructure and recuperating significant costs.

It's just very easy to keep piling infra costs on top of infra costs and not thinking about it, especially if it feels disconnected from company financials for most developers and they do not see a line between spending and jobs.

jeltz• 3 years ago

No, Spotify's success happened back when they mostly ran on their own metal. Going for the cloud happened at the same time their innovation started to stall.

marcinzm3• 3 years ago

It's actually non-trivial to run an efficient cost center department that actually supports other departments properly. The incentive structures are just horribly difficult to align. Cloud's selling point is that you won't have to spend 6 months filling out forms to get a single out of date VM (yes, that happened to me).

nopassrecover• 3 years ago

Until you get the worst of both worlds and have to align an enterprise architecture approval committee, get cyber sign-off, put the request through your service desk, have it land with some sort of enterprise task prioritisation team, and finally land with your internal cloud team to action the request your team isn’t empowered to do, only to then have a simple service provisioning turn into a massively overcomplicated set of extra cloud bits and pieces getting provisioned and retemplated and secured and configured over the course of months, as that overallocated team find 20 minutes here or there only to hit some new wall as the cloud settings look different to the last time they did it or some unforeseen setting requirement was overlooked in the original request, leading to a two week lag on email responses and ticket handover before it gets picked up again.

spamizbad• 3 years ago

You can end up in the same space even with a Kubernetes Cluster in the cloud when its fully subscribed and IT has no budget for more EC2 nodes.

spaceywilly2• 3 years ago

I would caution against drawing grand conclusions from these recent layoff rounds. Companies overhired during the pandemic, and now they are trimming that fat. It’s not necessarily a sign of any big strategic mistakes beyond “we hired too many people”

jklinger4102• 3 years ago

Companies overhired during the pandemic, and now they are trimming that fat

Citation needed

soderfoo3• 3 years ago

Generally I agree with what your saying, but

I've seen their cloud bill and it's significantly higher than 1,600 peoples jobs

An apples-to-apples comparison requires looking at all associated costs of switching to on prem (salaries, hardware, etc...).

I've only been a part of this analysis at a company dealing with a cloud bill in the low tens of millions, nowhere near the scale of Spotify (and I'm still relatively new to all of this).

And cloud has a lot more lock-in than most employees.

It's a shame there are not better abstractions to facilitate moving to and fro.

falserum• 3 years ago

Cloud providers would benefit from actively fighting such abstractions.

therealdrag0• 3 years ago

Kubernetes is a pretty decent abstraction no? If all your apps and databases are containerized you can deploy in azure or aws just as well. And many cloud DBs support open source interfaces like Cassandra or JMS or Kafka etc.

tootie2• 3 years ago

Is their cloud bill more or less than they pay Joe Rogan?

dijit10• 3 years ago

more, actually.

bogomipz10• 3 years ago

"Spotify was a stand-out, almost no large tech company bought into cloud like they did, and everyone said the same thing: "It's not our core competence, it would require more people".

I'm not sure what you mean by this as Spotify was actually quite late buying into cloud. They ran on bare metal through at least 2015. From their engineering blog:

">Thus, in early 2015 we started exploring what a cloud strategy would look like for Spotify."[1]

So they would have been running on bare metal through some of the biggest spikes in growth i.e launching in the US market. I don't think they bought in any more or any less than anyone else who transitioned from bare metal to cloud and for probably the same reasons.

[1] https://engineering.atspotify.com/2019/12/views-from-the-clo...

ttymck2• 3 years ago

This is a wild leap of twisted logic. You posit that they might not have to lay off employees if they instead.... Paid a team to manage their infrastructure instead of outsourcing that responsibility to the cloud.

apwell239• 3 years ago

I've seen their cloud bill

how did you see this. How do you know what all the discounts and backdoor deals that were applied to the bill. How do you know the final amount that was paid out.

i am skeptical that some rando is privy to this information.

throwaway2990• 3 years ago

lol why does Spotify even have so many employees to begin with. Doubt it was 1600 tech jobs cos they don’t need anywhere close to that to run the service.

pachico• 3 years ago

Firing people is business as usual. I don't know why this is usually taken with such surprise.

It's part of the life cycle of many companies to hyper-hire when money flows in, and cut lots of jobs when they "re-adjust". I don't think this is good, I personally don't like it, but I learned not to be surprised anymore.

We like cloud because it scales in and out: often management don't see workforce differently.

crote2• 3 years ago

Mass firings like these are not normal.

In countries with functional labor laws, it's straight-up illegal unless you're basically going through bankruptcy. Mass firings should only happen if either 1) there's a very significant economic crisis going on, or 2) the company is doing so poorly its immediate future is uncertain.

The Silicon Valley style mass-hiring followed by mass-firing style of management is indicative of poor management. In a well-run company this should never happen, as the same could be achieved by simply reducing the hiring rate and letting natural attrition take care of the rest.

lotsofpulp32• 3 years ago

Or, if you want to win big, you have to make big bets. This applies to both employers doing mass hiring and employees choosing to work at employers aiming for explosive growth.

It is not poor management, it is simply a different tactic. Sometimes things work out, sometimes they don’t. The fact that Silicon Valley has succeeded in producing the most profitable companies in the last few decades seems to be relevant.

gedy• 3 years ago

1) there's a very significant economic crisis going on

There is of sorts, with high interest rates and inflation. This is shaking the foundations of how a lot of companies have operated since 2008.

ianwalter2• 3 years ago

Instead of investing in massive podcaster deals, they should have just focused on integrating podcasts into the app in a sane way. I would pay more if it were as good as Pocket Casts, but it's nowhere close.

Mindwipe5• 3 years ago

The whole point was to move into podcasts for exclusivity so they had something they could put behind a hard paywall to boost revenue - the music service will never be significantly profitable and will probably never be genuinely profitable at all, so they need to move into another area or they will eventually collapse.

ianwalter2• 3 years ago

Yea I understand that, but whats the point of that strategy if users don't want to even subscribe to podcasts in the app because how bad the UI is. It's like they've never used a podcast app before.

sva_2• 3 years ago

I think you can listen to them for free but with ads.

pawelduda• 3 years ago

Maybe now they will be able to focus on what matters instead of enshittening UI every few months

Y-bar4• 3 years ago

At an average yearly cost of $125000 per employee they could either cut 1600 employees or not fund some random podcaster.

kerbs• 3 years ago

The average cost will far exceed $125000 fwiw

mouzogu2• 3 years ago

"..Spotify had taken advantage of cheap borrowing during 2020 and 2021, when central bankers cut interest rates sharply in response to coronavirus pandemic lockdowns"

“Embracing this leaner structure will also allow us to invest our profits more strategically back into the business,”
invest our profits more strategically back into the business

why didn't they do this in 2020 when they got zero interest loans and free money from the government?

profits are for "strategic" investment but loans are for un-strategic and unsustainable hiring? got it.

mewpmewp23• 3 years ago

I don't understand the question? They were able to use money more freely as it was more abundant, so they were able to take more risks. Now that money is more expensive, they need to be more careful about it.

ethbr12• 3 years ago

I think parent might be overemphasizing strategic in that quote.

> This is not a step back; it’s a strategic reorientation. We’re still committed to investing and making bold bets, but now, with a more focused approach, ensuring Spotify’s continued profitability and ability to innovate.

"Strategic" could be replaced with "efficient". They were previously optimized for growth -- now, they're optimizing for growth:krona.

Also, it is refreshing to see a head cut announcement that doesn't bury the lede: we're firing people, and this sucks.

mikrl• 3 years ago

More so now that it’s their own money and not yours they’re being more careful with it.

mouzogu2• 3 years ago

"They were able to use money more freely as it was more abundant, so they were able to take more risks. Now that money is more expensive, they need to be more careful about it."
able to take more risks

so who pays for consequences of the "risks"?

my whole point was to illustrate the idea of privatizing profit and socializing losses.

rchaud5• 3 years ago

They invested the pandemic ZIRP bonanza on the 'transformative' IP that is podcasts.

In lieu of actual profitability, they also chucked in $1bn to buy up their own stock to maximize the CEO's already enormous compensation.

https://techcrunch.com/2021/08/20/spotify-to-spend-1b-buying...

bogomipz10• 3 years ago

Wow, it's pretty wild that an unprofitable company spent a billion dollars on share buybacks.

htrp2• 3 years ago

Severance pay: We will start with a baseline for all employees, with the average employee receiving approximately five months of severance. This will be calculated based on local notice period requirements and employee tenure.

Is this a super vague way of saying we're letting go of the senior people with tenure first. The average severance being five months implies that most people being let go probably aren't the people hired during 2020 and 21.

On a separate note, we can add bandmates to the insane titles that a company uses for their employees.

andsoitis6• 3 years ago

Is this a super vague way of saying we're letting go of the senior people with tenure first. The average severance being five months implies that most people being let go probably aren't the people hired during 2020 and 21.

No, they're saying that severance is based on tenure (and local notice period requirements). On average, people laid off get 5 months worth of severance - some more, some less, based on tenure.

Scarblac• 3 years ago

Labour laws will apply, they probably can't just pick who they lay off. Maybe they have to let go the same proportion of people at all levels of seniority.

eythian• 3 years ago

Yeah, where I live (NL), it's required to be something like "group people into roles, then let people go in reverse order of seniority (i.e. LIFO) within those roles."

chrisandchris• 3 years ago

Some countries have longer notice periods. If you would work for Spotify in Switzerland, after 2 years you have 2 months notice. Given the period must starts with a new month (by law), your notice would start on 1st January. Adter 10 years its 3 months, where 5 months severance pay (as i understand it) would "only" cover at least 2 additional months.

BossingAround• 3 years ago

I don't understand how you got from the quote to "senior people are let go first".

dcminter• 3 years ago

I think they may have misunderstood the meaning of the word tenure (note "with tenure") and not realised it meant only duration of employment here (versus its use in US academia).

pyrophane• 3 years ago

I was surprised that the "average" is 5. It makes me wonder what that distribution looks like.

yieldcrv• 3 years ago

as always, this means US people are cut immediately while acting like a progressive employer but not sharing any of the values of their European homeland when they dont have to

joegahona2• 3 years ago

“Bandmates” is bad, and dishonest. It’s like Pfizer calling every employee “doctors.” Stolen valor.

linsomniac• 3 years ago

I guess that defect that's been open for 3 years to "actually shuffle large playlists" doesn't stand a chance.

Hakeemmidan• 3 years ago

Why do these mass layoffs keep happening in the software industry? Or is this a global phenomenon that exists across all industries?

ulfw• 3 years ago

Only to a small extend. Mostly it happens in software. And no it's not just "overhiring" (that doesn't happen across so many industries). That's only part of it. We all know with AI we won't need white collar jobs anymore. If I had children I wouldn't allow them to study CS. Not anymore.

thepablohansen• 3 years ago

What would you have them study instead? If you're optimizing for what AI is least likely to be able to accomplish, some forms of blue collar labor would probably rank highest on the list.

vlowrian• 3 years ago

I feel like you're overestimating the impact of AI on the current wave of dismissals. It's hard to say without any actual data, but there seems to be a lot of FUD regarding AI replacing white-collar and CS jobs.

I don't have better data than you, but I'd be very much surprised if AI would replace computer scientists rather than being a tool which will change what we'll have to be good at as computer scientists.

There is a lot of digitalisation to be done and AI might change the price of doing that, but it won't make a whole academic discipline obsolete.

dubcanada• 3 years ago

Software industry is a giant bubble 90% of the time, so it's usually the first one to go. But no most industries seem to be hiring averagely to better then average at least as per the JOLTs report.

whatyesaid• 3 years ago

A lot of these companies have people doing no real work, even afterwards of layoffs, they're bloated. You can't layoff essential people otherwise you die.

You can look at companies like Spotify and Twitter, they ship like one feature a year if you average.

fullshark6• 3 years ago

It's the end of the internet service software business cycle. This plus a ton of unprofitable VC funded companies unable to get the funding they were hoping to get with interest rates up lead to a massive pullback.

Will things change next year? Maybe if some IPOs hit and the VC pump and dump pipeline gets back up and running.

adam_arthur2• 3 years ago

Software companies are pretty uniquely positioned such that they have far more employees than are operationally necessary.

Not to say that those employees don't provide value, but the spread between operationally stable employment levels and current headcount is far wider than other industries.

Thus, more potential for large cuts.

Solvency4• 3 years ago

Ok but why?

abkolan• 3 years ago

The Spotify inserted ads during the podcast makes a lot of sense now. They are really trying to make the books look good. Is this a leading indicator that the podcasts could go more towards the exclusives / originals route? For example: Like Joe Rogan.

code_runner2• 3 years ago

Spotify is actively moving away from originals (or at least changing how they do it). Inseted ads gives them better tracking and with better reporting… $$$$

skywhopper• 3 years ago

I suppose I appreciate that the CEO was mostly honest about the goals and what the business actually values. “Supporting work”, ie operations, maintenance, etc is considered worthless. Near term financial ROI is the only metric that is important. Investments in the long term health of the business and treating employees with respect are of no consequence.

We all know this is true, but so few layoff announcements are willing to spell it out.

That said, the thing that’s missing is accountability of the executives. They overhired and overinvested in 2020-21. Where is the accountability for their massive failure of leadership?

kderbyma• 3 years ago

I predicted this......their API v2......that was all I needed to see you know they were firing a lot of people......they need to get profit somehow and they have no knowledge at the top....so they do what all dumb companies do....flounder until someone saves them....so cut cut cut.

someonehere• 3 years ago

Meanwhile Apple came late to the game and now is just sitting it out. Wonder what will happen in a few years?

nojvek2• 3 years ago

Post-pandemic, the trend of Corporations raking in higher and higher profits, while needing fewer and fewer staff scares me.

The most obvious and likely outcome is it drastically separates the ultra wealthy from middle class.

With rise of AI and automation, that trend will likely accelerate. The top 10% hold more than 50% of wealth. It's likely in a few decades, the top 1% will hold more than 50% of the wealth. They already hold 28% of wealth.

https://fredblog.stlouisfed.org/2022/10/the-wealthiest-0-1-o...

https://fred.stlouisfed.org/graph/?g=UdXz

nojvek2• 3 years ago

Post-pandemic, the trend of Corporations raking in higher and higher profits, while needing fewer and fewer staff scares me.

The most obvious and likely outcome is it drastically separates the ultra wealthy from middle class.

https://fredblog.stlouisfed.org/2022/10/the-wealthiest-0-1-o...

https://fred.stlouisfed.org/graph/?g=UdXz

TexanFeller• 3 years ago

Things are probably just going back to normal. Companies went on hiring binges while unprecedented cash was pumped into the economy and interest rates were historically low. Now that all that is being walked back employment levels are going back to 2019 or a bit before.

eastbound2• 3 years ago

How is that different than the IMF pumping cash in 1998 into the Russia economy, only so that private companies take the profits and create oligarchs and various lords, who then emigrated to the French Riviera with women who became widows there, empoverishing the Russian land even further, as shows by the economist Joseph Stieglitz in his book Globalization and its Discontents?

cglan• 3 years ago

isnt this just massive overhiring due to free money during the pandemic? Not sure this is an example of needing fewer and fewer stuff. Spotify is just not profitable except barely like 1 quarter

Aurornis• 3 years ago

The pandemic trend at many of these companies was to aggressively overhire. If you look at headcount for many of these companies it’s still significantly above 2020 levels and even often above the old trend lines.

If you hire an unprecedented number of people in short period of time, you’re almost always going to have to cut a significant number of them later. Hiring is hard and even during good times a rapid expansion like we saw during COVID hiring is going to bring in people and departments that don’t work out.

The most obvious and likely outcome is it drastically separates the ultra wealthy from middle class.

I think this doesn’t obviously follow. Like I said, hiring trends aren’t all that distorted if you average out the recent layoffs with the excessive COVID hiring.

next_xibalba• 3 years ago

Corporations raking in higher and higher profits,

To what is this claim responding? Spotify only turned a profit in 1 of the last 5 quarters. It has never turned an annual profit.

I actually think the story is quite different here. Tech companies had been hiring like drunken sailors leading up to the pandemic. They're only in the last year rationalizing down to levels that are necessary and productive. I have close friends at a few FAANGs and the stories of bureaucracy, bloat, and entitlement are mind blowing. Meta/Facebook made the right move by taking a hatchet to middle management. Let's hope the other big ones do the same before the plague spreads further.

apwell239• 3 years ago

Meta/Facebook made the right move by taking a hatchet to middle management.

They are all back( layer reduction was never really done in practice). It was just a dog and pony show. Meta is hiring aggressively again and middle management is bloated than ever before.

lettergram• 3 years ago

The poor today are the middle class of 15-20 years ago and the kings of 300 years ago.

It’s not perfect but a rising tide does raise all ships.

Regarding the ultra wealthy, the disparity was actually greater in the past.

All that said, you distribute wealth by reducing taxes on the poor and increasing it on wealthy. Alternatively, shifting the growth differential such that the poor grow faster than the wealthy (hard in a capitalistic economy). That said, I don’t see the wealth disparity as a problem itself; if you have the top 1% gain more wealth but it’s easier to become the top 1% or the top 1% rotates out often it’s probably better

KineticLensman• 3 years ago

a rising tide does raise all ships

The thing that has always bothered me about this analogy is that a sea level rise affects all ships uniformly while the magnification of wealth doesn't. It's more like everyone standing on a plain and then the centre deforms upwards, creating a peak of wealth while most people are on the (only slightly higher) foothills.

gusgus01• 3 years ago

The poor of today (2023) are the middle class of 2003-2008? That's a hard comparison with the housing crash of 2008, but I don't think the tide has risen enough for that comparison to be accurate.

CodeMage• 3 years ago

The poor today are the middle class of 15-20 years ago and the kings of 300 years ago.

I've yet to hear this claim from someone who has been truly poor at least once in their life. When you have to live paycheck to paycheck, and stress out every single month over the uncertainty, not knowing if you'll be able to pay the bills and have enough to eat, let me know if you feel like "the king of 300 years ago".

sydbarrett742• 3 years ago

People are better off in absolute terms, yes. That is incontrovertible.

What matters to the human psyche is relative well-being compared to one's peers. And by those measures, the 'middle class' is demonstrably worse off than 50 years ago.

rorroe53• 3 years ago

Middle class 15-20 years ago was able to buy, or even finance building of their own houses. How many poor you know who do that?

Only thing that has really improved is access to cheap Made in China goods, and perhaps plane tickets. But actual necessities like housing are becoming more and more unaffordable.

butlike6• 3 years ago

"a rising tide raises all ships." What happens to the ships when the proverbial glass runneth over?

emodendroket6• 3 years ago

They’re not “taking in higher and higher profits” so much as abandoning speculative investments.

marcosdumay2• 3 years ago

Short term profits are almost completely defined by historic investment (and thus, historic staff).

How long term profits will react to those changes is entirely still to be seen. There's nothing telling you profits will get higher and higher, or that they will diminish, or anything else.

csmiller• 3 years ago

Spotify isn’t really profitable, and their deals with the labels mean that they probably never will be IMO

zehaeva• 3 years ago

Can't wait for the Butlerian Jihad to begin!

Flippancy aside, as others have pointed out, Spotify isn't turning a profit. Other than the tangency of blaming AI for all of our ills, this seems like a non-sequitur.

jmarchello2• 3 years ago

Anytime I see layoffs like this, All I hear is "We hired for the sake of hiring when money was cheap and we wanted to signal 'growth', But now reality has set in and we need our employees to serve a purpose beyond simply headcount".

In my opinion they did these employees a disservice by hiring them in the first place. We need our companies to act more responsibly regardless of the price of capital. Innovate sure, but don't fill up your tank when gas is cheap just to do doughnuts in the parking lot.

maxehmookau3• 3 years ago

I wholeheartedly agree. It's about time governments started signalling to employers that this sort of behaviour will not go unpunished. After all, it's the state that will have to pick up the tab for the rampant over-hiring in the form of social security and healthcare.

freedomben3• 3 years ago

What should the punishment be? Fines for layoffs?

ActionHank2• 3 years ago

Just remember they signed Joe Rogan for over 200 million and he's not brought in nearly that amount for them.

Did they retrench the people who made that decision? Did they retrench the management who approved that contract?

Spotify employees should be pushing for some degree of corporate and fiscal responsibility given they are retrenching, but they still gave Joe the bag.

weebull2• 3 years ago

Are you missing a "not"? Otherwise you're not making sense.

rsanek• 3 years ago

i feel like this is a pretty hard thing to assess without access to internal metrics

phpisthebest3• 3 years ago

Under What metric do you apply that? What goals did they have for his program?

My understanding was the purpose of buying Joe Rogan was 2 fold, one of course is to bring in new users, but that was not the only goal (maybe not even the primary goal) the other goal was to get more of their current users to have more listen time on podcasts and less on Music, they pay far far far far less for podcasts (in many cases nothing) than they do for Music.

If they were able to shift the total listen time it could have more than paid for Rogan even with out new subscribers

The contract is up for renewal very soon so if they drop him we know he did not meet their objectives. Somehow I bet they renew

bogomipz10• 3 years ago

They also signed a deal with Meghan Markle and Prince Harry that was worth 20 million. They agreed to part ways in June. I'm guessing the reason was that it failed to deliver financially. See:

https://archive.is/Hgh3V

jaywalk2• 3 years ago

Unless you are pretty high up at Spotify, you have literally no idea how much Joe Rogan has brought in for them. His podcast has been number one on the platform since it launched.

dimitrios1• 3 years ago

Just remember they signed Joe Rogan for over 200 million and he's not brought in nearly that amount for them.

The fact that they signed Joe for that amount, and continued to air everything throughout all the controversies, throughout all the COVID years, and through some artist departures over him, signals that he has more than recouped that investment for them.

https://www.newsweek.com/joe-rogan-more-popular-ever-statist...

pm90• 3 years ago

Innovate sure, but don't fill up your tank when gas is cheap just to do doughnuts in the parking lot.

Thats a nice ideal, but its not something that the companies are made to consider seriously. To them, cheap capital signals an opportunity to juice up their growth numbers, and expensive capital signals an opportunity to cut problematic employees from the team (and keep others on their toes).

Until there are real consequences these companies will not change.

chasely• 3 years ago

I read it more like "we hired when money was cheap and were hoping that we could create some new revenue streams but that didn't work out and now we don't have much hope of revenue growth in these areas so we have to reduce costs."

kamikaz1k• 3 years ago

That is how it should be read, because this is how these companies operate. My company's CFO was talking about this as we pushed for profitability (since the market expectations changed) and rationale for investment was exactly like you said.

"It's our job to grow, profitably, so if we think we can generate more than what we spend, we can invest. But if its not working, we will cut it."

Unless you have a specific reason to believe it to be otherwise.

fullshark6• 3 years ago

What's the consequence for doing your employees a disservice? Maybe a few of the best and most important employees get jaded and quit. Morale company wide takes a hit. These companies don't seem to care and I guess I'm not sure they should.

For me, it's not just morale that's gone to shit, but I feel like I've woken up to the nature of the employer/employee relationship with all these layoffs. I was blind but now I see, we ARE human resources, and it's very likely none of us are irreplaceable, none of us matter really all that much to our employers and the cost cutting via offshoring/remote employee replacement / no backfill is probably just getting started.

weebull2• 3 years ago

The flip side is that these people had a good job for a few years, and can hopefully springboard on. The alternative is that they weren't hired by Spotify, or potentially at all.

As long as they were hired in good faith, and not to just see which people worked out, I don't have a problem.

nyokodo• 3 years ago

we ARE human resources, and it's very likely none of us are irreplaceable, none of us matter really all that much to our employers

Now, remember this the next time you’re tempted to lose sleep, sacrifice family time or leisure for your employer and then act accordingly.

querez2• 3 years ago

I feel like I've woken up to the nature of the employer/employee relationship with all these layoffs. I was blind but now I see, we ARE human resources

I think that's just a normal process of growing older. Also: yes, of course you are a resource to your employer. An annoying one (stell or laptops don't usually talk back and has demands). I also don't think there's anything wrong with companies behaving this way. By all intents, purposes and employment contracts, it was always meant to be a "work for payment" type deals, nothing more. Of course, ideally your interests and the companies' align beyond that narrow scope; e.g. you're both interested in you becoming an expert in X, or in solving problems in area Y. But it really comes down to you being a resource for the company to produce stuff. Thinking back I realized that my elders and mentors and everyone worth listening to always tries to tell me that (e.g. by telling me "you're not your job", "look out for your WLB, noone else will", "a job is just a means to an end", "HR protects the company, not you", "always keep in mind that you're disposable"...). And yet it seems to be a lesion that everyone needs to rediscover for themselves eventually.

iamflimflam1• 3 years ago

“The graveyards are full of indispensable men(/women)”

It doesn’t matter how important or irreplaceable you think you might be - life/businesses/people will carry on without you.

commandlinefan3• 3 years ago

none of us are irreplaceable

But the smart ones know now to be as irreplaceable as possible, however they have to.

hn_throwaway_995• 3 years ago

I was blind but now I see, we ARE human resources, and it's very likely none of us are irreplaceable, none of us matter really all that much to our employers...

Interestingly, there was a really good article in the NY times yesterday that made that exact point: https://www.nytimes.com/2023/12/03/business/economy/doctors-...

Basically, the article was talking about how being a doctor or pharmacist used to be a very respected profession, and most doctors/pharmacists didn't previously see the need to unionize. With all the consolidation that's gone on in medicine over the past couple decades, though (the article talks about how many of them used to be partners in small doctor groups, that is increasingly rare these days), they now realize they're wage slaves just like the rest of us, and their management has been treating them like interchangeable widgets to squeeze the most productivity out of.

If doctors are unionizing, maybe software developers should rethink their historical aversion to the idea.

sheepybloke• 3 years ago

One of the big things I saw when a company I worked at did layoffs was that more people left voluntarily than were fired, especially a lot of the people I saw as the best and brightest. Heck, it's why I left. To me, that's the biggest side affect of the layoffs. There's going to be a brain drain, not because you fired people, but because the morale and mental of the company has shifted.

svarcoe• 3 years ago

And they were still hiring too! My first day was last Monday haha, last day today

hn_throwaway_995• 3 years ago

That's so messed up when companies do that. Curious what your separation package was?

bogomipz10• 3 years ago

Wait, you were hired and laid off in the same week? I'm really sorry that happened to you. The fact that that was allowed to happen suggests a very dysfunctional and incompetent management culture.

Solvency4• 3 years ago

What team. What role.

local_crmdgeon2• 3 years ago

Hope they gave you a fat severance package

falcolas• 3 years ago

You're kinder than I am, ascribing an actual staffing problem to their layoffs. All I see and hear these days is, "We want to bump up our share prices, and it's easiest to just lay off some people."

gizmo• 3 years ago

Who is "they"? Spotify executives who assumed the money printer would never run out of ink? The managers who hired and hired to expand their own empire? The software engineers who engaged in "resume driven development" by stacking abstractions on top of abstractions so they could play with cool new tech at work?

There is a lot of opportunism out there.

vkou2• 3 years ago

Top blame is on middle-management (100+ reports), because they set the rules-in-practice for how the organization actually operates, and second blame goes to top management (C-level), because their job is to keep the middle-management in check.

The line employees are just responding to the incentives that these two groups create, they aren't the ones steering the ship into the ground.

Any significant layoff that doesn't have a disproportionate number of people from those two groups thrown overboard is ass-covering. They are the ones who screwed up.

emodendroket6• 3 years ago

It’s hard to know what’s “responsible” when you’re operating a business at a loss in the hopes of becoming profitable eventually and then it just keeps going for years and years without making money.

dsaavy• 3 years ago

A business by definition is not a valuable and transferrable business if every single person (including the C-suite) cannot be replaced without the business collapsing.

No one is immune to this or an exception. Top to bottom.

coredog64• 3 years ago

In my opinion they did these employees a disservice by hiring them in the first place.

These people got a high(er)? paying job during the period, have a well known company on their resume, and are being let go during a layoff such that no blame is assigned to their exit. What’s not to like?

michaelt5• 3 years ago

If they knew that was what they were getting into, great.

On the other hand, if I hire a guy, he quits a secure job, he moves his family all the way across the country, and then 3 months later I fire him because I changed my mind about what I need? That guy is absolutely not going to thank me.

hk1337• 3 years ago

I remember comments clamoring how great Spotify was going to be because of their European roots compared to Apple (Music) a U.S. company.

boringg• 3 years ago

If we put ourselves back into the shoes of 2019-2020 there were people who were talking about a post-capital world because money was so cheap.

I'm not defending all the companies that hired quickly - but if you all recall it did seem like the world had changed significantly with way more use of technology. I believe the underlying bet was once everyone uses these tools people will inevitably keep using them. Coupled that with cheap money (for the past decade) and incredibly fast growth and no-one thinking that the rates were going to go up at least not in the near future.

I find it hard to act so certain and so clearsighted that companies were acting in bad faith as you seem to point to.

mrcwinn• 3 years ago

There is still no crystal ball. You take the opportunities as they are presented, especially given that your competitors are doing the same. Where exactly was your commentary on Spotify's business when times were better, urging them to leave more people without jobs?

wesapien• 3 years ago

Put a cost to unwanted behavior and make people think twice with siding with Moloch

Aaargh20318• 3 years ago

All I hear is "We hired for the sake of hiring when money was cheap and we wanted to signal 'growth'

In a healthy company, I would expect every employee to contribute to the bottom line, either directly or indirectly. They hired these people because they needed them to do a job, a job that somehow helps making the company money.

As such, unless there are sudden significant changes to the market and product (which as far as I can tell is not the case here), firing employees should result in lower revenues. After all, employees generate more money than they cost, that's the entire point of employees.

This leaves me with a bunch of questions when I read things like this:

1) If the company can get by without these people, what were they doing in the first place? 2) If these people did not contribute to the bottom line (directly or indirectly) what was the point in hiring them? 3) If they did contribute, why let them go?

yCombLinks• 3 years ago

I've been a spotify subscriber for over a decade. Every single update has made the windows version worse at least. They've rebuilt and redesigned it repeatedly, for whose benefit I don't know. Obviously that is just the app side part of the whole org.

andruby• 3 years ago

After all, employees generate more money than they cost, that's the entire point of employees.

That is only true for profitable business and only true _on average_ across all employees. It isn't true for each employee individually.

Some employees are a lot more valuable at generating money than others. This isn't necessarily the employee's fault.

With layoffs and restructurings the business should be trying to improve that average profitability per employee.

hbossy• 3 years ago

firing employees should result in lower revenues Why? They built the product and live off the subscription fees. The service is running, people are paying. They don't need to build anything new to keep getting paid. Does a landlord need to keep paying for the construction crew after his building is finished?

crazygringo• 3 years ago

This is completely backwards.

They didn't hire "for the sake of hiring" -- they hired specifically to build up their podcasting and audiobook efforts, which were totally new products within the app. Which they thought were essential to staying competitive -- e.g. what if people start moving over to Amazon instead with its Music+Wondery+Audible, or other competitors?

Now it's turned out those bets haven't been as successful as they wanted, so they're keeping them but massively scaling back on future investment. Which means they don't need those employees anymore.

Honestly, what do you expect Spotify to do? Not try to stay competitive, and risk a competitor taking their place, and then go the way of Pandora? Do you think it's wrong to hire teams to build products when you hope the products will succeed but you can't know 100% for sure?

This is just how normal, healthy business goes. You make bets, sometimes they succeed wildly, and sometimes they don't. When they don't, it often results in layoffs because there's not enough profit to keep paying those employees with, and there isn't immediately any new product for them to work on.

Believe me, a company with profit margins as thin as Spotify's can't afford to "hire for the sake of hiring". That's just not how it works.

jebarker4• 3 years ago

Honestly, what do you expect Spotify to do?

Innovate to grow, if growth is the objective. For example, they could better serve the audiophile market with higher quality offerings. Not as much growth there though.

buro93• 3 years ago

They placed a bet, and that bet didn't pay off.

But what I'd expect is for them to cut only a little (not 17%), because they would place another bet on something else to remain competitive.

To cut so heavily looks like they've no great idea on the next bet that they could make, that they don't believe those people they hired could contribute towards another thing in the near future (or they have no runway to explore doing so).

Companies should place bets to stay relevant and grow, this looks like there isn't a big bet now.

ctvo5• 3 years ago

I think trying to normalize a ~20% workforce reduction as business as usual is a little bit much here.

Management made a lot of mistakes to get to this situation. It wasn't we tried a few things and it didn't work out, it was we burrowed too much money, spent too much money, and risked too much.

What other tech company has cut this deeply recently? You name their competitors, like Amazon and Apple -- is it happening there? 20% is not 2-3%.

lukeschlather• 3 years ago

I am honestly looking to move to a competitor because of their podcasting and audiobook efforts. Well, and I don't necessarily care about those things per se but Spotify used to be a focused music app, and they keep removing things from the app in favor of whatever new "growth thing" they want to do this year. I never know when I load up the app what is going to have changed and take me an extra 5 minutes to find what I want.

They have done so much damage to their app's usability by trying to "grow" that someone could probably sell me on some ultra-premium subscription that actually had a good music player that functioned more like the music players of 15 years ago.

rez9x4• 3 years ago

I recently left Spotify for Apple Music, in large part because of this new development path. I don't want podcasts, audiobooks, etc mixed in with my music. I prefer separate apps.

I think what bothered me more was the focus on branching into these new paths without any innovation in the music department--I'm sure there was innovation that wasn't visible to me. I'm tired of the same black and green color scheme. I don't like that I don't have a 'Library' and everything just goes in liked or a playlist.

I think their expansion into other media was a signal to me to look for someone doing a better job at specializing.

Kaytaro• 3 years ago

It’s also healthy to get backlash from the public and investors for layoffs. Personally I don’t think it’s ever right to layoff employees for leaderships mistakes. It should be used as a last resort only when the entire company is at risk of going under. Based on their post it doesn’t sound like that’s the case, they even bragged about a “positive earnings report”.

dbbk3• 3 years ago

You're half right. The podcasting and audiobook areas already had layoffs before. This is now layoffs across all areas of the business.

AdmiralAsshat• 3 years ago

Honestly, what do you expect Spotify to do?

The people who made the decision could bear the brunt of the failed "bet". But I'm willing to wager that the CEO's year-end bonus isn't going to change radically in light of this.

enlightenedfool• 3 years ago

So, can at least the execs that made the wrong bets be fired? Those are multi million dollar mistakes. But nope… they just take “complete responsibility” and fire the dev teams.

baggachipz2• 3 years ago

Honestly, what do you expect Spotify to do?

Not spend a fortune on Joe Rogan and then lay off people.

jLaForest• 3 years ago

This is just how normal, healthy business goes

17% layoffs is healthy? No thanks

dangus2• 3 years ago

I think that people get really upset about layoffs like they're an example of poor planning, but in reality it's all a calculated risk.

Laying off employees isn't a very negative thing from the perspective of the corporation. Very few costs are associated with laying off employees. A few months of salary, but that's it. It's an at-will arrangement.

I learned in a business class that, mathematically, most companies acutally take too few risks. It's not hard to understand why when you start doing some the math: if you invest $1 million into 10 projects 9/10 of those projects fail but the one successful project makes $10 million, then your investment broke even. But our brains see a 90% failure rate and want to be more conservative with our investments. Let's say, alternatively, we invest in 5 projects to be more conservative with our money, but because we didn't take enough moonshots we never found a project that paid off, so now we lost $5 million instead of breaking even. This hypothetical thought experiment is why many companies should be over-hiring and taking risks.

If you make a mistake, so what? You lay off the workers and you immediately stop paying for that cost, and you might even have something to show for taking the risk.

Also, yes, it takes more people to build something than to maintain it. Employees don't like to hear it, but hiring employees that you deliberately plan to lay off in a few years is a completely valid strategy.

If we want this to change then we need to have our governments have better layoff protections in place, like mandatory severance or notice periods. The WARN Act does this but only for large employers making large cuts.

nostrademons• 3 years ago

Is it though?

There's always a business justification for hiring, simply because there has to be to get the headcount approved. That doesn't mean that it's the actual reason, as in the deciding factor that gets the decider to say "yes, we're going to hire more people". Principle agent problems are a thing. You can always come up with reasons that are true but wouldn't by themselves change your decision. And conversely, you can figure out what someone's actual reasons are by looking at counterfactuals where those conditions didn't occur and the person (or a peer) made a different decision.

Between 2020 and 2023, Google went from 118k employees to 190k. Meta went from 58,604 to 86,482. Stripe went from ~2000 to ~7000. Coinbase went from 1200 to 4500. These companies are not competing significantly in podcasting and audiobook efforts. But what they do have in common is that they are growth tech companies whose business models are pretty sensitive to interest rates and availabilty of capital. Who didn't hire in 2021-2022? Mostly industries like restaurants and hospitality that are not particularly interest rate sensitive, and were still recovering from COVID. They're catching up now that people are spending more.

That makes me strongly suspect that directors hire simply because there are funds available, and there are funds available because rates are low. Indeed, this is the Fed's lever on the unemployment rate. If they didn't, then changing the money supply wouldn't have any effect on unemployment or wage inflation, which would be purely determined by shifts in consumer demand.

dclowd9901• 3 years ago

If Spotify had a brain in their head they would’ve known that Amazon’s offering was desperation against losing so badly to the main big baddie, not a genuinely good product. The Amazon music player is a joke and the service sucks at integrating with other services and products.

bogomipz10• 3 years ago

They didn't hire "for the sake of hiring" -- they hired specifically to build up their podcasting and audiobook efforts, which were totally new products within the app. Which they thought were essential to staying competitive -- e.g. what if people start moving over to Amazon instead with its Music+Wondery+Audible, or other competitors?

If this were true then wouldn't the cuts be limited to the podcasting and audiobook arms of the company i.e. the source of the overstaffing? The announcement however states the cuts are across the entire company - "To align Spotify with our future goals and ensure we are right-sized for the challenges ahead, I have made the difficult decision to reduce our total headcount by approximately 17% across the company."

robin_reala4• 3 years ago

Maybe it’s just me, but as a CEO if you misjudge enough to have to fire a double-digit percentage of your staff shouldn’t you face some consequences, like demotion or losing your job yourself? Daniel only owns 7.5% so it’s not like he’s a majority that can push anything through.

pmelendez• 3 years ago

Honestly, what do you expect Spotify to do? Not try to stay competitive

That's a reductionist way of looking at it, but an alternative way would have been what Daniel said on that letter; They were "more productive and less efficient and they needed to be both".

From my ivory tower I do see some things that could have been done differently, such as adding only one new offering (maybe just podcasting), or rely more in contractors than employees and set the temporary expectation of the roles up front.

parineum• 3 years ago

They didn't hire "for the sake of hiring" -- they hired specifically to build up their podcasting and audiobook efforts, which were totally new products within the app. Which they thought were essential to staying competitive

How many employees does it take to take an app that already works great on playing audio files and do a bit of UI redesign and change those audio files from music to podcasts and books? It's not like they're building this thing from the ground up.

The podcast app I use was built by one person, granted over a few years, and it works way better as a podcast app than spotify does. They are going to layoff 1,500 people. I assume those aren't all engineers but I think a team of 10, (including devops and QA) could build each of these features in the timeframe they did plus the additional business side of the ventures (negotiating contracts, acquiring rights, etc.).

What were the other 1450 people doing?

jmarchello2• 3 years ago

I'm not saying businesses shouldn't make bets or innovate, but in my experience hiring more people to do those things has a point of diminishing returns, and that point is much lower than most people think. From what I've experienced, more people tend to slow innovation, not accelerate it.

And while Spotify may not have hired for the sake of hiring, my comment was more targeted to the general behavior of tech startups during the ZIRP years, where I've personally experienced companies just hiring to show they they're growing, even when they have very little work for those extra personnel to do. It's not often intentional, but is rather the result of poor discipline or lack of forethought.

geodel2• 3 years ago

"We hired for the sake of hiring when money was cheap and we wanted to signal 'growth'...

But that's the whole point of modern day life. Any benefit we have gotten we never looked critically what was the cost. It is only at discomfort and disruption we gain this great self-awareness of the world.

They did disservice in same sense if we consider giving job in people is some service to employees.

sparrowInHand• 3 years ago

? If you are hired by a architect and a company is downsizing, its actually a recommendation. Your software works- it needs less people for maintenance then for growth. And at a company thats stagnating and going into survival mode- your skills will not be needed except for the last ditch pivots (which will be a architectural mess). Once more from the the top - to be let go in a software role from such a company, is a recommendation.

hammock2• 3 years ago

Anytime I see layoffs like this, All I hear is "We hired for the sake of hiring when money was cheap and we wanted to signal 'growth', But now reality has set in and we need our employees to serve a purpose beyond simply headcount".... In my opinion they did these employees a disservice by hiring them in the first place. We need our companies to act more responsibly regardless of the price of capital. Innovate sure, but don't fill up your tank when gas is cheap just to do doughnuts in the parking lot.

I struggle to understand comments like this one. Spotify were being responsible at the time. Their employees are not 30-year mortgages, they are volunteer employees given no promise of continued employment.

Through a few degrees of separation it all boils down to "we could do X when prime interest rates were 3%, and now they are 8% we can only afford Y"

notpachet2• 3 years ago

They were being responsible at the time.

Another strong contender for humanity's future epitaph.

paulddraper• 3 years ago

don't fill up your task when gas is cheap

Of course you should!

do doughnuts in the parking lot

Of course you shouldn't!

Did Spotify do that?

rPlayer6554• 3 years ago

You can't have your cake and eat it too. There are plenty of other lower risk companies that have way lower chances of layoffs, but they don't pay as well. Working at a company that tasks risks and has a high rate of return also has a higher chance of making the wrong bet and needing to cut you. If you want a perfectly stable job go work in the government: you'll be practically unfirable.

- someone who was layed off from a FAANG corp. I was not done a disservice, I knew what I was getting into.

ghaff7• 3 years ago

Or the public sector. Anyone who thought a money-losing company like Spotify was a safe ship to jump on board didn't think things through.

culopatin• 3 years ago

On the other hand, 17% of headcount had a job during that time. Which one is better?

smugglerFlynn• 3 years ago

Why, though? Investors are paying for doughnuts and smoke, and many tech companies are really in the drift racing business, not in "commute rationally" business.

The reality is, current economy has much less demand for this kind of a road show, but all their hiring was totally rational.

scarface_749• 3 years ago

I keep reading this.

I don’t know how much Spotify pays or if it pays above market. But I much rather have a high paying job - especially if it doesn’t require relocation and then get laid off than not have a high paying role at all.

A job is not a marriage, it’s more like a a semi serious dating relationship. I’ve had 9 jobs in 27 years and 7 since 2008.

A job is merely a method to exchange labor for money to support my addiction to food and shelter.

Once either me or the company decide it isn’t on our best interest to continue the transactional relationship, we break up and I change my relationship status to “open for work” and put myself back out there.

Amazon was my 8th job. I knew from reputation and 2nd hand experience, that eventually Amazon was going to Amazon.

https://news.ycombinator.com/item?id=38474212

And I planned accordingly from day 1.

https://news.ycombinator.com/item?id=37969302

fragmede2• 3 years ago

Nine serious relationships in 27 years, but no marriage? I bet you live in one of those heathen countries where sex before marriage is legal, don't you? If you weren't allowed to have sex before marriage, would you still be unmarried after 27 years of relationships? Sweden, where Spotify is headquartered, is 8,600 kilometers from the San Francisco VC-backed tech scene, and is just as culturally removed from it as well.

lr4444lr• 3 years ago

Hot take: it's a life skill to look at a company beyond the salary they offer you and get at least a basic sense of whether they are over staffed, well managed, offering a valuable service, and not in a dying industry - or at least be sure your role there is doing something high value to the critical service provided. Too many employees IME are just too comfortable with ignorance about their employer outside of their team and the other teams they work with directly.

maxehmookau3• 3 years ago

I still cannot fathom any board allowing the CEO at the helm of a public that made cuts of 17% to remain in place.

That's a huge pivot in organisational structure by any measure and shows clearly poor judgement.

bsnnkv• 3 years ago

17%? Hah, I just got hit by layoffs at my last employer that targeted 25% of the workforce. Guess what happened to the CEO...

That's right. Nothing.

ketchupdebugger• 3 years ago

I wonder if they laid off 17% of management and leadership as well. probably not, but they should

senda• 3 years ago

weren't they paying data scientists 500k?

josefresco2• 3 years ago

I consider Spotify like Hulu - existing as a puppet to give "the industry" a centralized distribution service. I don't ever expect them to make a profit, unless they decide to pivot and sell what's left to another corp. Am I wrong?

Tao33003• 3 years ago

I think you're kind of right. The thing about Spotify is that my initial reaction was "it's about damn time". It's not like it was technical innovative. Everything needed to make it had been around for at least a decade, they just had to get all the legal stuff figured out first.

umeshunni2• 3 years ago

It's not a puppet - they are officially part owned (3-4%) by the Universal Music Group. Sony Music Group and Warner Music Group have sold some and all of their shares in Spotify, respectively

emodendroket6• 3 years ago

Has Spotify ever made money? It seems strange that all these music streaming services have limped along for years without having a model that makes any money or sense. Convenient for the rest of us I suppose.

Czarcasm• 3 years ago

They have an operating profit, but they choose to reinvest it all back into the company, thus they don't have an overall profit. They could reduce the amount they are reinvesting into the company at any time in order to produce an overall profit.

This is exactly what Amazon did/does. Doesn't mean that they have "limped along"

emodendroket6• 3 years ago

Do they? This would seem to suggest otherwise. https://www.statista.com/statistics/1022122/spotify-operatin...

doctorpangloss• 3 years ago

It's complicated. A lot of money exited from Spotify after its IPO. The rightsholders (Warner, UMG...) got an outsized return on that investment. Smooth it out since then and it looks like a more routine profit. I'm not sure if basic financials are an adequate format for a backcatalogue monetization business.

moogly2• 3 years ago

Daniel Ek and Drake certainly have made money.

Smaller artists? Not a chance. They get paid in exposure, which is the #1 rule not to do in the creative arts.

emodendroket6• 3 years ago

I’m not even talking about artists though. Just Spotify the corporate entity.

saos2• 3 years ago

That’s much

Solvency4• 3 years ago

Spotify spends millions per month on lavish "creative" team salaries in NYC who do nothing but create gradient playlist covers and other low grade "design" work that is 100% unnecessary. All while they redesign and destroy their UX and product experiences every iteration. All of that money could go straight to the artists.

honeybadger1• 3 years ago

From a company that projects far too much, not surprising.

charles_f2• 3 years ago

To understand this decision, I think it is important to assess Spotify with a clear, objective lens

... then proceeds to vague MBA word without a single number to support them.

We debated making smaller reductions throughout 2024 and 2025

What was not debated was keeping people they hired.

we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact

We're left to guess what this means. What's work around the work? If that work is now unsavory, why can't they work on work rather than around it? Is this describing reducing the management layer? (support) or customer/partner support? Will they be replaced by automation? I get you don't want to go into specifics of who's let go, but then don't pretend you're providing a clear analysis, and don't give a washed out business lingo salad instead.

TBH I don't see what changed on Spotify for a customer perspective in the past few years. I still see bugs I reported years ago, the UI is largely the same. Not that I'm complaining, I just care about the music. But that leads me to think either the dev team is producing stuff that's on the fringe and optional, being quite inefficient, or mainly working on maintenance, and the bulk of the opex is going elsewhere.

ssnistfajen6• 3 years ago

Frankly I think the UI has gotten consistently worse. Playing saved/liked (Spotify keeps changing the word) songs from a specific artist is still very hard and convoluted. "Now Playing" pop-up panel on desktop was a feature no one asked for. "Your Library" revamp was confusing and solely for the purpose to push podcasts which somehow made it harder to view the podcasts I actually follow. Then comes the dreadful rounded corners on everything but also weird empty spaces around the UI resulting in wasted screen real estate. I held onto Google Play Music until its very last moment, all because of Spotify's dreadful UI.

cragfar• 3 years ago

We're left to guess what this means. What's work around the work? If that work is now unsavory, why can't they work on work rather than around it? Is this describing reducing the management layer? (support) or customer/partner support? Will they be replaced by automation? I get you don't want to go into specifics of who's let go, but then don't pretend you're providing a clear analysis, and don't give a washed out business lingo salad instead.
TBH I don't see what changed on Spotify for a customer perspective in the past few years. I still see bugs I reported years ago, the UI is largely the same.

He didn't get into it because you answered it yourself. And anyone who has used it for a while has most likely the same initial thought.

mrsilencedogood• 3 years ago

This reads to me like "the darn developers are spending too much time not laser-focused on business impact and keep bikeshedding and doing make-work!"

It's impossible to tell if this is what's happening though. It can really go either way.

I've seen orgs where the perf-review meat grinder is driven so tight that engineers are essentially punished/PIPd for doing things that NEED to happen even if they aren't sexy business impact. Like upgrading library versions (not all of them, just the core/most important ones!) so you don't wake up one day and realize you're on a 6 year old version of a core library/framework. Even remediating incidents was treated as "not impactful work". This resulted in the expected shitstorm and teams were literally churning employees because oncall was so bad and just doing anything was so awful, and it took a staff engineer's guile just to get an otherwise-relatively-simple project over the line because you had to be a ninja just to navigate the awful existing mess of 10 years' worth of laser-focus on business impact.

And I've seen orgs where the engineers run rampant, doing random side-quests constantly, junior engineers run amok over-architecting every project with all of the skills their CS degrees gave them, senior engineers make magnum opuses of medium-sized projects, and principal engineers pontificate and aid and abet any and all architecture-astronauting that anyone else in the org does. And naturally none of it was done in any way shape or form in coordination with product.

And naturally there's everything in between. So whether they have a healthy amount of focus on non-sexy work and wish they were neglecting it more to reap shorter-term product-focused gains, or they have too much bikeshedding and they want to be more product-focused, it is difficult to say.

(Naturally the cynic in me says it is probably the former, though...)

charles_f2• 3 years ago

laser-focused on business impact

If you only knew the PTSD that the expression "laser-focused" is triggering. From an organization that had 12 focuses per quarter, and as many "core-priorities".

jzackpete• 3 years ago

I hope they fired the person who came up with "smart shuffle" and thought tying the shuffle button to a successful network call was a good idea

Tao33003• 3 years ago

So far the only playlist I'm using smart shuffle with is my Christmas one. I put in a bunch of the weird shit I want to hear, and it injects some mainstream stuff to keep the wife and kids happy. So it's doing a bad job matching my tastes, but I'm exploiting that as a feature.

okrad• 3 years ago

The successful network call condition is particularly frustrating. However, I enjoy the feature on the whole.

kenhwang3• 3 years ago

Seriously such a buggy and undesirable feature. Smart shuffle replaced the default shuffle for me on all interfaces that didn't get updated to switch between the two shuffles, so on Android Auto, the only shuffle option was smart shuffle and I had to use my phone to switch to dumb shuffle.

Then it isn't even really smart or a shuffle. It just inserts the same 3 songs, in every playlist regardless of how well it would fit.

ugiox• 3 years ago

Now everyone sees just layoffs again. But there are so many companies thriving and keeping their workforce. As they are in balance. And are also happy to grow at a smaller pace.

crorella2• 3 years ago

This is so important, growing at a small and healthier pace.

Some companies try to make the reason of their existence to grow as fast as possible, no matter what.... and in the process they destroy the value they originally offered to its customers, processes, people and quality controls.. for what?

There was a class from Darden School that talked about that, I recommend reading this summary from it https://iveybusinessjournal.com/publication/growth-to-greatn...

sitkack• 3 years ago

So effectively contractors. Companies shouldn't be allowed to "shed" this much of their workforce in a system like the US's here we have a very poor safety net.

They bulked up, built their products and now want to slim down and enjoy their profits at the expense of these sacrificial workers.

mrkeen5• 3 years ago

Sidestepping the issue of the US's labour laws, I almost feel like this is what a healthy software industry should look like.

You go in, you build, and when the job is done, you leave.

We just haven't figured out how to get the job done yet.

ssnistfajen6• 3 years ago

If only employers are capable of communicating that expection to prospective employes in an honest manner instead of doing the whole "we are a family" gaslighting act.

matchbok5• 3 years ago

One alternative is never hiring them in the first place, which is a real possibility if some bad ideas like yours were put into law.

carstenhag• 3 years ago

Realistically they would have a permanent contract at a company that contracts out developers.

Flexibility (at the cost of a premium) for the client company, safe for the employee.

janalsncm• 3 years ago

Businesses should be more responsible in hiring not just for the good of the workers but for the company as well. Hiring 17% more than you should’ve means there was a ton of waste. Rather than seeing this as a sign of prudence like most investors might, I see this as a reflection of poor planning.

scarface_749• 3 years ago

Your safety net is spend less than you make which should be easy for tech workers who even for your CRUD developers can easily make twice the median household wage.

bdcravens• 3 years ago

at the expense of these sacrificial workers

Were they not paid during their employment? Not to mention everything they are doing for those exiting employees (average five months of severance including healthcare, 2 months of career placement services, etc)

blindriver• 3 years ago

This was a good layoff note. He didn't say anything gag-worthy like "I take full responsibility for this."

Most SaaS companies got a huge pandemic bump and overhired in 2021 and 2022. I think many if not most that haven't cut 20% will be cutting 20% or more in 2024.

whateverman23• 3 years ago

You can't fully remove the "gag-worthy" label unless they use the word "layoff". Calling it "rightsizing" or "headcount reduction" is gag-worthy.

A great gag-worthy line: "Please know we are focused on treating our impacted colleagues with the respect and compassion they deserve".

Also, if the note doesn't include the CEO stepping down (even with a transition period would be fine), then it's not a good layoff note.

withinboredom• 3 years ago

I'm going to say it, this is why we need unions. Only a union can tell them "no, you're not. Maybe 5%." And then negotiate something. The only saving grace here is the generous severance package.

mrbonner2• 3 years ago

I didn’t know they have that many people (9000) to work for a single product. I’ve been a subscriber for more than 5 years and the app on the iPhone just gets worse everyday. Why?

- daily updates is gone. This is where I can get a snapshot of all new releases from artists I love. I’m not sure if Release Calendar is the new one but I don’t bother to check.

- I listen to classical and the song title naming is just subpar. For example, “Well-tempered Clavier, Book 1, J.S Bach, Angela Hewitt, Prelude in C Major is too long to be in the title. Especially, the rat if the album is just a repeat alternate between prelude or fugue and the chord.

- recently play list stopped syncing between my phone and my desktop app after 2022 for some reason. Is it a bug or they just stop doing this since it costs more to sync?

I probably won’t switch to a different stream service for now as there is not much differences for me to migrate.

keehun• 3 years ago

If you primarily listen to classical music, Apple's new Classical Music app (part of its Music subscription) is *fantastic*.

alejoar• 3 years ago

What's not fantastic is apple's lock down of their ecosystem. I'm not paying for some lacking android app by Apple.

crorella2• 3 years ago

another nice option is Qobuz, the sound quality is good for the newer releases.

savanaly• 3 years ago

I was using Apple Classical happily for ~1 month, then it stopped working. It would load all the metadata and let me browse around but when trying to play a song it wouldn't progress.

I restarted my phone, reinstalled the app, went through several iterations of iOS updating, the problem never went away. No other app, including Spotify, has this issue on my phone. After a month of paying for Apple Music without Classical working I shrugged and unsubscribed. Big loss for me, and for them, since I am exactly their target audience with Apple Classical.

waffletower• 3 years ago

I am quite steeped in the Apple ecosystem, but Apple's crude syncing behaviors and runaway AMPLibraryAgent bugs/invasiveness, has me quarantining Apple media software. Use of Spotify does not mangle my private music library.

comprev• 3 years ago

Always nice to see Apple Music Classical mentioned on here. I was one of the lead engineers building things before the acquisition and to my knowledge they still use tooling I built around automation of audio ingestion. Streaming music was a fascinating industry to work in

mrbonner2• 3 years ago

Really? I didn't know Apple has a dedicated streaming app for classical now. Will check it out. Thanks

rumori• 3 years ago

Also not fantastic, how Apple handles multiple devices. I forgot how they call it, but registering new devices is a pain, especially if you have multiple Macbooks, iPads, iPhone, there’s an edge case where you have to wait 90 days before it starts streaming to your brand new iPhone. You better reach out to their support, where they never acknowledge the issue but always fix it in 5 minutes.

https://discussions.apple.com/thread/250348779

Cub3• 3 years ago

The feature I miss that spotify has is being able to control music playing on my desktop from my phone or vice versa

8f2ab37a-ed6c• 3 years ago

Not to mention them killing playlist radio functionality, which was a great way to have a custom Pandora-like experience whose seed you could control.

saos2• 3 years ago

recently play list stopped syncing between my phone and my desktop app after 2022 for some reason. Is it a bug or they just stop doing this since it costs more to sync?

I thought this was just me. Defo a bug.

dbtc• 3 years ago

Check out Idagio for classical. No affiliation.

jes5199• 3 years ago

I think that beyond some relatively small number, engineering headcount functions as a demonstration of wealth - it doesn't actually make the product better, it doesn't make you ship faster (Brooks's law). but it makes you look big and important and justifies your market cap

disgruntledphd2• 3 years ago

Sales scales as O(N), eng/product should scale at sqrt or log. Ideally, obviously.

elicksaur• 3 years ago

I want to like this theory, and it seems like there is some social clout aspect to the phenomenon.

But, the bump these companies get in the stock market whenever they do a round of layoffs indicates the market cap is justified by what you would expect.

renegade-otter2• 3 years ago

Exactly. VCs want to see growth by watching double the engineering headcount on every subsequent visit. It's ALL about optics and burning money for show. But the party is ending.

I have seen it first-hand - company opening a new floor to show growth, but it was half-empty.

They are laying off people this week.

DotaFan• 3 years ago

I didn’t know they have that many people (9000) to work for a single product.

I would presume it's many more products than just Spotify app.

Lalabadie• 3 years ago

I didn’t know they have that many people (9000) to work for a single product.

Having had a wee insight into how it worked at Rdio (obligatory: I miss Rdio!), one big chunk of the answer is they need a literal army of lawyers.

A worldwide streaming music library is a hoard of licensing liabilities for every possible country, with deals that expire, renew and change hands daily on every possible mix of business days and holiday calendars.

As for the design and development headcount, I guess they dispatch teams and tasks as efficiently as Meta with their thousands of acqui-hired product people.

SleepilyLimping• 3 years ago

Everyone misses Rdio.

dandesim• 3 years ago

It's very much more than supporting 'one product'. Off the top of my head, regarding engineering, I can think of:

1. iOS App 2. Android App 3. Windows App 4. Microsoft App 5. Web App 6. Underlying API 7. Artist Portal/App 8. Advertising Portal/App 9. PlayStation App 10. Xbox App

There are probably entire engineering teams for each micro-service in the overall product (personalization, playlists, player, etc.).

pants2• 3 years ago

They have Spotify apps on everything: Garmin watches, Roku TVs, the "Car Thing", Amazon Echo, Facebook Portal, Discord, Bixby...

That's a lot of apps to maintain and keep up to date with the latest features.

ntlk2• 3 years ago

They used to have Soundtrap, which is a DAW in the browser and had two separate apps. They sold it back to the founders AFAIK.

tracerbulletx2• 3 years ago

Every damned time this happens someone asks how it's possible they have so many employees when it's just an app... Spotify owns multiple large podcast studios, has sales people, negotiators, music industry people, lawyers, facility staff, lawyers, marketing, content curators. It is the business engine through which the vast majority of the world consumes music these days. You can quibble about if they have too many engineering employees, but at least get the real number first.

MichaelZuo2• 3 years ago

This seems false, Whatsapp became 'the business engine through which the vast majority of the world' sends texts on the backs of 20ish employees.

Even assuming delivering music, podcasts, royalty payments, negotiations with artists, etc..., takes 100x more headcount in total, that should still be only around 2000 employees.

9000 just means most are not being that productive.

araes• 3 years ago

Spotify's issues and costs are royalty payments. Of the €567 million increase in cost of revenue for the Nine months ended September 30, 2023, higher royalty costs were €534 million of that total. (~94%) [1] This delta is vs 7,159 total cost of revenue on 9,576 of revenue (€millions).[1, pg4] From looking at the rest of the report, most other cost of revenue contributors are minor (5 here, 10 there).

In the total category, R&D (1,257), S&M (1,101), G&A (430). R&D trending up, possibly plateauing, S&M, G&A trending down. [1, pg4] All relatively minor compared to 7,159. (<=1/6)

[1] pg 36, Spotify 2023 Financial Report, "Spotify Technology S.A.", FORM 6-K, October, 2023 - https://s29.q4cdn.com/175625835/files/doc_financials/2023/q3...

firecall3• 3 years ago

For me it’s the forcing of Podcasts down my throat that I hate.

No Spotify, I do not want to listen to Joe Rogan and other right wing podcasts.

Just let me hide Podcasts already :-(

some_furry• 3 years ago

Spotify without podcasts would be delightful

averageRoyalty2• 3 years ago

I don't care what American "wing" they are, I don't want podcasts and don't appreciate getting ads for them on the "ad-free" service I pay for.

seoulbran• 3 years ago

I may be in the minority here but I still enjoy the Joe Rogan Experience. As an avid listener the past 12 years I can tell you he is not "right wing" in any way. He was a liberal and believes the left "left him behind" when progressivism hijacked the democratic party. Most intellectually honest humans agree with him.

commandlinefan3• 3 years ago

they have that many people (9000) ... just gets worse everyday

As much as I hate to see layoffs from an empathization perspective, maybe this is the reason? Remember Brook's Law - adding manpower to a late project makes it later. Too many cooks spoil the broth and all that.

guluarte• 3 years ago

I count not open the app on my phone because the timezone reported by my carries was not compatible

fennecbutt• 3 years ago

They keep changing the design of the app for the worse, just nonsensical stuff. Like how many UX design people do they have? Cause clearly they're just changing stuff to make themselves feel useful. The heart changing to a plus, what the fuck Spotify?

mdhen• 3 years ago

I can reccomend deezer. I switched away from spotify last year and ended up trying like 5 different options before settling on deezer. No complaints, great quality streams (lossless), can upload your own songs and their recommendations system is really good.

neycoda2• 3 years ago

It's called "maximizing profit" "for the shareholders" by "saving money".

They consider their workforce a liability and expense instead of an investment and necessary for quality and competitiveness.

They're just cutting into their workforce to impress investors to bilk more money out of them.

It's a sick philosophy for short-term gain that will ultimately destroy the company.

renegade-otter2• 3 years ago

It's hundreds of "microservices". That's why they created Backstage.

You just need that many people if you are going to go that route. Unfortunately for them, once the economy goes from "stupid good" to "very good", it all starts falling apart.

It's unchecked complexity that at some point is going to destroy you.

And it can literally destroy them.

"From Unicorns to Zombies: Tech Start-Ups Run Out of Time and Money"

https://www.nytimes.com/2023/12/07/technology/tech-startups-...

softwaredoug• 3 years ago

The layoffs suck. But WHO was laid off? What depts?

I think it's important data because the labor market needs to adjust its skills away from what's not in demand, to what's IN demand.

deng3• 3 years ago

Spotify is a completely mistery to me. I'm asking: What does Spotify really have? They don't own the music. They don't own podcasts (OK, they may have some exclusives like Rogan). All they have is a license, a bit of software, and lots of users. How will they ever turn a profit? What's the end game here?

I just switched my whole family from Spotify to Deezer and it was literally a matter of minutes. There are even services that move all your favorites/playlists over and it worked flawlessly.

kwanbix2• 3 years ago

Deezer is a completely mistery to me. I'm asking: What does Deezer really have? They don't own the music. They don't own podcasts (OK, they may have some exclusives). All they have is a license, a bit of software, and lots of users. How will they ever turn a profit? What's the end game here? I just switched my whole family from Deezer to tidal and it was literally a matter of minutes. There are even services that move all your favorites/playlists over and it worked flawlessly.

deng3• 3 years ago

Very witty. Yes, the same applies to Deezer. What I'm saying is: it's a race to the bottom, and in the end, musicians will suffer (they already do).

Hackbraten• 3 years ago

Spotify Connect is a real game changer. I tap a song on the web player and it streams it on our living room amp, which supports it natively. No apps involved whatsoever.

itsoktocry• 3 years ago

Spotify Connect is a real game changer.

That sounds like a minor quality of life feature, hardly a "game changer". Do you think this is impossible for other companies to replicate?

anderber• 3 years ago

I thought other streaming services have similar functionality, right? I know Deezer has Deezer Connect.

kenhwang3• 3 years ago

This has been the biggest feature keeping me on Spotify.

Tidal sorta has a connect feature, but I've found it to be really buggy (often wouldn't play or wouldn't tell the remote control device what is playing) and not as widely supported.

Apple Music is even worse since tends to rely on AirPlay, which murders quality and requires the remote to stay on the same network as the player.

lotsofpulp32• 3 years ago

What does Spotify really have?

As far as I can tell, its biggest beneficiaries are the 3 record labels who can use Spotify being one of its customers to be able to negotiate better terms with Apple/Alphabet/Amazon.

guyzero2• 3 years ago

Spotify is a sales channel. Walmart doesn't actually make anything, US car dealerships don't make anything. But they have customers and that's all it takes to sell something.

And, strangely enough, once a sales channel is big enough it can begin taking a bigger slice of profits and telling suppliers what they should be doing (a la Walmart).

MuffinFlavored• 3 years ago

Walmart doesn’t technically make anything (not sure if it’s true to be honest) but they probably “enable” a lot of manufacturers to “make things” under their Great Value brand

amanda99• 3 years ago

They are a music distributor, and they have good relationships with the rights holders and will do their legwork for them.

rrrrrrrrrrrryan• 3 years ago

Yeah it's just playlists and network effects, mostly.

There's a Spotify playlist for everything, young people regularly share Spotify playlists each other, and for many: the hardest part about switching to another service is losing access to those playlists.

The "official" playlists provide two other functions. One is to initially amplify artists. Record labels can buy slots on these playlists, just like they used to buy airtime on the FM radio stations of yesteryear.

The second is that Spotify can use its own filler muzak on its playlists to keep licensing costs down. E.g. they pay a pianist to play generic "Christmas piano music," make up an artist name, and put a bunch of those songs on its official holiday playlists.

ssnistfajen6• 3 years ago

I like their music discovery functions e.g. generated playlists and song/playlist/artist "radio". My playlist variety expanded greatly over the past 3 years because of these features from Spotify. A centralized platform that is relatively to use (nonsensical UI changes aside) is a strong incentive for users to stay, though by no means a moat.

The end game was always about rapidly burning VC money to acquire more users, while kicking the can of profit-making down the road. Now ZIRP has ended for the time being, the chicken has finally come home to roost.

sb82442• 3 years ago

Deezer costs more for family than I pay now on Spotify. Why switch?

deng3• 3 years ago

Parental control. Spotify has basically no QC on uploaded podcasts, and it is filled with video podcasts with stupid TikToks, porn disguised as "ASMR", and lots of garbage used for money laundering.

dalbasal• 3 years ago

So...

Bodybuilders do this thing called "bulking and cutting." The best way to add muscle fast is to overeat. Work out lots. Sleep lots. Eat lots.

You get fat, but you also get muscular because food is never a limiting factor.

Then, they lose the extra fat with a crash diet.

Google, FB and such are such money machines that they never have to cut. They can just bulk. The others... they want some of that rapid growth potential too, but can't afford to add fat forever.

Corporate bulking and cutting.

righthand• 3 years ago

But Google and Facebook did cut earlier this year?

thomastjeffery4• 3 years ago

There is only so much metaphorical food in the world.

zeroonetwothree• 3 years ago

This analogy doesn’t seem to add any explanatory power.

Corporations can’t magically know the optimal number of employees to maximize profits. And even if they could this will change over time. So we should expect them to cut when they have too many and hire when they have too few.

blehn• 3 years ago

What "muscle" did spotify add? Not sure the metaphor works. It's bloat from bad management and copying what other companies are doing.

ssnistfajen6• 3 years ago

Google, FB and such are such money machines that they never have to cut.

Not sure what you are trying to achieve by saying something so blatantly untrue that a two-word query into any search engine can debunk it as fast as your browser loads a web page.

brainzap• 3 years ago

"whats my purpose?" you play music, and maybe display lyrics

dcchambers• 3 years ago

This absolutely sucks for those involved, especially given the timing. Not only does it add stress to an already stressful time of year for many, but hiring typically slows down in December anyway. That said it's good to see five months of severance pay. Hopefully long enough that the effected folks can take a little time off to refresh themselves, not stress about finances, and give the industry time to pick up hiring again in 2024 once new annual budgets kick in...

atbpaca• 3 years ago

I wish CEOs would resign when layoffs happen. It should be like some governments where the whole cabinet resigns. If layoffs are a necessity, then the CEO and the top management should show the example and take responsibility for taking the company into the wrong direction, leading to layoffs. That would be fair and more understable than a "thank you for your hard work and commitment".

danielmarkbruce6• 3 years ago

Business decisions are difficult. If the result of everyone that didn't pan out was "you are fired", no one would take any risk, decisions would take forever.

It's so hard to fire people in France, that some large companies simply have a policy of "no france office".

ep103• 3 years ago

And yet companies are founded every day in France, and their economy is doing just fine.

If a business cannot afford to do business in a country, then that business should not be allowed to do business in that country.

DiggyJohnson4• 3 years ago

Wouldn't this result in CEO's never doing a layoff or admitting the business needs one?

danielmarkbruce6• 3 years ago

Almost every suggestion to help employees doesn't consider the second order effects.

expazl• 3 years ago

That's like demanding that anytime a F1 driver takes a pit stop he should be fired. Obviously the pit stop itself doesn't improve the time, and he's just sitting still. Imagine if a driver was sitting still after the race started!?

Layoffs are not desirable for a company, but sometimes they are required. The fact that a CEO decides to go with layoffs when it's the right thing to do shouldn't be seen as a failure of the CEO. It's the pit stop that keeps the company from exploding if you just ignore all financial health markers and keep everyone employed until the money runs dry and you have to gut the business and sell of part to cover the bankruptcy.

ttymck2• 3 years ago

That has to be one of the least applicable analogies.

Laying off 1/5 of staff is not a "pit stop" to refuel. It's an admission of staggering mismanagement.

HereBeBeasties2• 3 years ago

Lay-offs aren't necessarily a sign of failure or bad strategy, so your logic does not compute.

Lay-offs happen for all sorts of reasons. It may be very reasonable to have X number of people one year, but changed market conditions, or financing rates, or whatever else mean it no longer does the next year.

People don't have magic crystal balls. But even if they did, it may still make sense to hire people while financing such a thing is cheap, and to lay those same people off when it isn't any more. Make hay while the sun shines, and all that.

You may not like the fact, but getting rid of poor performers makes businesses stronger and better. Rounds of lay-offs undeniably make such decisions easier to make and justify in large companies.

CEOs who do the same (or more) with fewer resources are generally rewarded. As a shareholder in the company you'd want them to do more with less and make you more value, right?

You might as well argue that any CEO who needs to hire more people has failed. That sounds obviously silly, but it's genuinely an almost equivalent argument.

All of this may not be pleasant for those involved and especially those who are losing their jobs, but that's capitalism for you. Big business doesn't tend to optimise for people's feelings - it cares more about the bottom line and being competitive.

In this case there is an obvious and pressing need. The streaming music scene may be a tremendously complex place to operate a business in, with all it's licensing and labels and countless jurisdictions and legal complexities, but both Apple and Google are sitting there ready to eat Spotify's lunch if they can't figure out profitability.

guax• 3 years ago

Jack Welch school of business made students for eternity. The first to pay will always be the employees.

neop1x• 3 years ago

They have 9,500 employees, yet their web app doesn't even offer a simple feature to speed up a podcast. How pathetic...

zaps• 3 years ago

I still can’t get Backstage set up correctly.

nine_zeros• 3 years ago

Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact

I hope they mean empires of managers.

jmartin2683• 3 years ago

Spent all of their time finding new ways to spend money and never bothered to make any.

neycoda2• 3 years ago

Geesh, glad they're trying to save the company by firing people. Lord knows they wouldn't survive otherwise. They gotta tighten their belts in this profit drought!

I mean, uh, actually they're just trying to save money by competing with their workforce instead of making their products better, am I getting that right?

Spotify will reduce total headcount by approximately 17%

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