Spotify CEO surprised that laying off 1.5k negatively affected operations

https://archive.md/2024.04.23-193436/https://fortune.com/europe/2024/04/23/spotify-earnings-q1-ceo-daniel-eklaying-off-1500-spotify-employees-negatively-affected-streaming-giants-operations/

by peonyzul • 2 years ago

9 7 2 years ago

archive.md

mikece• 2 years ago

Makes it all the more interesting that the Twitter layoffs after Musk took over didn't negatively affect operations. I was expecting the Fail Whale to make a cameo but I don't think it ever did.

not_your_vase• 2 years ago

I still have a pretty hard time understanding what are thousands of people doing at single-product-companies. I have yet to find any normal[0] product (big ones too) that was built by a team with a bigger headcount than 10 coders. Okay, there are non-tech employees also, and all kind of supporting things... but 9000 people for a music streaming service? Even 900 sounds a lot... to me it sounds they did not lay off too many people, but they laid off the ones that they shouldn't have.

[0] - sure, not talking about full operating system level projects. But for example some of the biggest live streaming websites were put together by a group smaller than a football team.

ben_jones• 2 years ago

Global 24/7 operations in a litigious industry is going to take a lot of people.

Then they have over 615 million users. That’s a lot of overhead in customer support, billing, etc.

Then they’re expanding into incredibly diverse markets like India. How do you expand in India? Do you hire 5 Norwegians? No you open offices in India, lots of offices, because there’s over a billion people there.

Ultimately the need to expand into complex markets like India, China, and South America is going to take a lot of people growth. With people growth there are inefficiencies. And it’s an explanation that answers a lot of these questions with Google headcount for example.

blinded• 2 years ago

I have a buddy that works there (pre and post layoff), they say it is not a fun spot to be currently.

noashavit2• 2 years ago

seems on brand

jnaina• 2 years ago

Large companies overhire for a number of reasons during robust economic/growth conditions including having a sizeable ballast that can be jettisoned when encountering inclement economic weather.

Also necessary optics to show Wall Street that they are focused on cost and not just growth, as part of the quarterly virtue signalling exercise during quarterly reporting. Damned be the impact to staff morale, culture and overall longterm goodwill for the company.

Trick is to know what and how to cut, without impairing performance and growth trajectory, and ensuring that the cull is managed while minimising negative news fallout.

There are now whole teams in HR now dedicated to this function, to manage large purges beyond the usual annual performance reviews/PIP exercises for un-regretted attrition exercises.

With AI removing wholesale the need for human intervention/involvement in certain work functions (in talent management, Customer Support, etc), right-sizing becomes ever more important to stay competitive...

noashavit2• 2 years ago

All that might be true, but as a CEO you should understand that mass layoffs will have a negative impact on your brand. Even if they were "justified."

Spotify CEO surprised that laying off 1.5k negatively affected operations

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