Spotify Is Screwed

https://www.wired.com/story/spotify-layoffs-music-streaming-future/

by pseudolus • 3 years ago

36 68 3 years ago

wired.com

jononomo• 3 years ago

For the life of me I can't understand why Spotify would need more than 3,000 employees.

fragmede2• 3 years ago

Which is a fair opinion, but how's that 3,000 break down? Are they all coders or salespeople or...?

dna_polymerase3• 3 years ago

I could write Spotify in like a weekend or two tops! I don't see the need for all that dead weight. Personally, I don't like coding mobile apps, so idk maybe hire like 2 people (1 Android and 1 iOS) dev for that. I'll do the backend. Easy savings really.

adrr• 3 years ago

Revenue per employee is $1.6M before the cuts. Thats efficient.

https://markets.ft.com/data/equities/tearsheet/profile?s=SPO...

goalieca• 3 years ago

But what are the costs because looking back it seems they are well into the negative earnings per share.

HDThoreaun2• 3 years ago

For normal tech companies with low marginal costs sure. Spotify pays 70% of revenue straight to labels though, they need far more revenue per employee than normal tech companies to make the math work.

Geee• 3 years ago

It's an interesting question. I guess they are mostly sales or support people, which need to be scaled linearly to a number of customers, labels, artists, etc.

I guess people misinterpreted the parent's statement. Spotify had 9,000 employees and downsized to 7,500. I think downsizing to 3,000 is a quite reasonable ask.

ReptileMan2• 3 years ago

As the owner of the site previously known as twitter showed - once you are out of the hockey stick phase you could do with a lot less than anyone thought possible.

more_corn• 3 years ago

By doing a lot less than anyone expected.

vidanay2• 3 years ago

2000 lawyers, 500 devs, and 500 admin?

AlotOfReading• 3 years ago

They had thousands of engineers alone. Many years ago, Spotify adopted the infamous "squad" model where each individual UI element or feature would have a dedicated team of 6-8 developers, designers, and PMs. Each of these teams would be organized into higher level groups with yet more cooperation staff, and so-on for a couple more levels. Add on all the people making tools for developers, admin, the thousands of additional people to deal with the music industry/sales and yeah, not hard to see where the headcount came from.

They changed structure a couple years back, but headcount didn't really go down.

ryandvm• 3 years ago

Wait until you find out how many employees DocuSign has...

(It is literally 10 times more than you would think.)

HDThoreaun2• 3 years ago

My understanding is that docusign has a massive sales department. Does spotify even need any sales people?

dschofie• 3 years ago

This feels like a clickbait title. I don't think that Spotify is in that unique of a position compared to other tech companies that have gone through "hypergrowth" and are now focusing more on profitability.

beanjuiceII• 3 years ago

there have been an over abundance of stuff like this circling around HN lately

ToucanLoucan• 3 years ago

I said this a ways back in another thread, but I think over the next 10 years or so, we’re going to find out exactly how much of the tech sector was built on the back of absurdly low interest rates making money basically free. Just borrowing and borrowing and borrowing over and over gesturing vaguely to the concept of “behavioral data” in the ethereal future and how you’ll make it all back advertising mattresses and food subscription boxes.

msoad• 3 years ago

I read the whole article but didn't learn anything new or interesting. Why Spotify is screwed? I thought the music labels have leverage to squeeze Spotify or something like that but the entire article is just stating what has happened with the recent layoffs and financial statements

femiagbabiaka• 3 years ago

IMO there would be absolutely nothing wrong with going back to a pre-streaming world. I use Qobuz and Bandcamp to buy albums with no DRM already, it's great. It's more expensive than using Spotify, sure, but that makes sense, as the article makes clear. Bandcamp is proof that more equitable business models are possible.

DoesntMatter225• 3 years ago

Had a convo with a top Spotify developer getting paid really well. He was, I thought, incredibly arrogant, he talked about Spotify as if was OpenAI or something.

He was open in discussing how they only want the best candidates and how hard their interviewing process is, he explained that is why they are so successful.

I pointed out that Spotify is losing money at an unsustainable rate. The whole thing to me was comical. Spotify exists in a space that is a complete commodity at this point. I switched to YT music recently (because I didn't want to see ads) and to me YT music is as good or better.

Spotify had a sort of first mover advantage but drastically over hired like Twitter and everyone else did. I guess we'll see if they can get to profitability.

GoToRO• 3 years ago

You're kidding, right? YT Music is like a 20 songs playlist. It's not worth anybody's time even if it's free.

jazzyjackson• 3 years ago

I guess you mean the auto-playlist/radio stations play the same 20 songs?

I've had same experience as parent, Apple/Spotify/YT Music are interchangeable but for a few exceptions in who got a license to what, in which case YouTube wins because of bootleg uploads (Mos Def's Ecstatic comes to mind, ain't nobody got a license to stream that, but there it is on Youtube)

arter• 3 years ago

For my taste Yt music has almost everything, but spotify hardly has half my playlist.

I've found most of the music I listen to through youtube. So it's not suprising.

But I'd wager that almost every song on spotify is uploaded to youtube as a video. Then it should be available on yt music unless they have flagged massive amounts of videos as not musical.

standardUser2• 3 years ago

YT Music has the roughly the same library as Spotify. They all do. They really are mostly-interchangeable.

kozikow• 3 years ago

how they only want the best candidates and how hard their interviewing process is

I sometimes feel like those algorithmic challenges at interviews are more for making developers feel they work at the "top team" than filtering the candidates. I am not salty about it - I am very good at those, did lots of Topcoder back in the day.

Most of the people in the industry agree that they have a terrible signal-to-noise ratio (or any other standardized interview method for developers). Any method that works doesn't scale, but large IT corps don't want to hear that.

terminous• 3 years ago

I sometimes feel like those algorithmic challenges at interviews are more for making developers feel they work at the "top team" than filtering the candidates.

I think that's partially correct, but a side effect. I think the real function is to make managers and execs feel that their devs are the "top team". But totally right about it being more about feelings of superiority than objective and relevant qualities for the job.

ozim• 3 years ago

Makes sense there is a lot of self worth or pride people attach to their work. It is quite common in software devs I know.

Especially young and impressionable ones. I am past 35 so I am past all of that. I know I do good work and I don’t need external validation as much as I was 20-something.

reactordev• 3 years ago

So long as those algorithmic challenges are actually in-use. Warranted. If it's just to flex that last little bit of grey matter, not warranted. The issue is software complexity is such a spectrum that so too must the interview process. No standard "developer 101" interview exists because each company has different software needs. An entry-level exam at Google will look different than an entry-level exam at Dunder-Mifflin. I think better expectations and better communication are the way to have successful (and meaningful) interviews. Yes, code test and all that but you should formulate the interview so that it gives you a good understanding of what they would be like to work along-side. I agree though with what you said.

dmix4• 3 years ago

Spotify exists in a space that is a complete commodity at this point

There is massive lock in since they have years of my music listening history and have the best recommendations around. I also share an account with 2 other people in the same boat where it'd be extremely disruptive to switch.

That's hardly a commodity type situation and what you listened to + how long per song has never been a transferable thing in the industry and music recommendation algorithms significantly fluctuate in quality (youtube only redently improving theirs thanks to Tiktok competition doing it better than them). Spotify is top of the field. The hifi (finger quotes) stuff like MQA they have coming soon means they'll be competitive with TIDAL for quality, and there's only 2 hifi options in the industry with large libraries.

Gys2• 3 years ago

More anecdata: I do not mind much my spotify historie. We choose mainly radio channels or listen to a specific artist. In general (news, music, movies/netflix!) I think recommendations suck big time and are overrated. Better ask friends.

DoesntMatter225• 3 years ago

You are probably an exception in how much you care because of history. Spotify to me stinks because they keep recommending the same 20 songs to me.

nikanj• 3 years ago

Alas they flush all that data down the toilet and play you whatever, based solely on Payola deals

standardUser2• 3 years ago

I use both and I prefer the Spotify interface by a mile, but I'm "stuck" with YT Music because they let me upload my own MP3s (Spotify does not). Without that ability, I can't make playlists I want because I don't have access to the songs I want.

But yeah, they bare essentially interchangeable, unless you care a lot about your "year in review" stuff.

DoesntMatter225• 3 years ago

Yt has year in review as well now I think. As far as the interface yt seems like a complete clone of spotify

Gud• 3 years ago

It’s extra sad, because you used to be able to put your own MP3 files in Spotify. If I recall correctly, it would even sync those files to other devices!

But this is long ago now, I might be mistaken

giantrobot• 3 years ago

He was, I thought, incredibly arrogant, he talked about Spotify as if was OpenAI or something.

What do you mean? They revolutionized everything...by putting an iPod in the cloud. /s

vidanay2• 3 years ago

They aren't screwed, since apparently you can't make any changes to your account plan. I've been trying to downgrade from family to individual for a week and I keep getting an "oops...try again later" error.

You can't lose business when you don't let your customers change their plan!

klardotsh• 3 years ago

You might not lose business, but you'll certainly attract the ire of the FTC...

dmix4• 3 years ago

1500=17%? Why do they have so many employees??

nerdo• 3 years ago

Pretty nuts, wasn't winamp like 5 people.

sethd• 3 years ago

Is this satire?

Spotify may very well be bloated, but this comparison is ridiculous.

splittingTimes• 3 years ago

Asking myself the same question. With the previous layoffs they were around 7500 people. That is mind boggling.

What do the all do all day??

Gys2• 3 years ago

Support? Now replaced by a LLM? It seems the trend…

fy202• 3 years ago

Apparently in 2014 the entire company only had 1354 employees.

https://www.statista.com/statistics/245135/spotifys-revenue-...

dham• 3 years ago

Modern frontend dev

sublinear• 3 years ago

From my experience this is wildly incorrect. Not even big tech hires that many devs, especially for frontend. That's at least half the reason why most frontends are terrible.

gafage• 3 years ago

[deleted]

doctor_eval• 3 years ago

Is this a joke? Spotify is European.

taylodl• 3 years ago

Spotify had roughly 9,000 employees prior to the layoffs. What if they took the approach of X and let go of 80% of their staff - where would that put them?

1,800 staffers.

Just throwing this out there - I've worked for companies producing far more sophisticated products with under 500 employees in total. I'm honestly not understanding why you would need 1,800 employees - and that's an 80% reduction from where they were!

Spotify Is Screwed

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