Spotify reducing employee base by about 6% • Hacker News Board

Re: Spotify reducing employee base by about 6%

#151

Post by MAGZine » Mon, Jan 23, 2023, 3:04 PM UTC

ben7799 wrote: post #125

I've seen some good analyses lately showing spotify's business model just can't survive in the long run with the way things are going in the economy and the record companies are squeezing them while simultaneously maneuvering to own them/buy them over time. Apple/Amazon/Google are diversified giants that can seemingly get away with running things without a need to make as much money as Spotify/Tidal/Whatever which ju…

you do realize that young people overwhelmingly stream, and do not generally purchase vinyl, right?

I've heard this idea of streaming being bad for music bandied about, but I don't believe it. streaming solved by piracy problem by getting people to actually pay for music. People in the industry like to complain about streaming, but I'm not actually sure that 'the good ole days' are actually better, or if people just have rose-coloured glasses about what the actual state of things were.

You are right that streaming-only companies cannot afford to take the same loss on streaming as Apple/Amazon/Google. And IMO that's probably a good thing: we need to find the balance between producers and consumers, not subsidize it with phone sales.

Re: Spotify reducing employee base by about 6%

#152

Post by ErikVandeWater » Mon, Jan 23, 2023, 3:04 PM UTC

eigen-vector wrote: post #32

This is probably the least tactical message amongst all the companies that have laid off people. Ek's spent most of the time rambling about efficiency and organizational changes to leadership positions who'll be least affected by the layoffs. Then comes the layoff news. It's almost as if he's rectifying someone else's mistake and everyone getting laid off should be thankful about it. I wish CEOs read some of the emai…

Yeah, starting of a note about layoffs talking "reiterating" about the "most defensible business strategy" is extremely tone-deaf.

Re: Spotify reducing employee base by about 6%

#153

Post by imchillyb » Mon, Jan 23, 2023, 3:04 PM UTC

halgir wrote: post #97

jillesvangurp wrote: post #54

Earlier quoted context omitted.

Netflix has been doing the same thing by cracking down on sharing of accounts between family members not living in the same house, etc. I'd probably sooner cancel Netflix or Amazon Prime than Spotify. I've actually been thinking about that lately because they seem to be putting out less nice content lately. I might just start subscription hopping for a while. Binge on a bunch of HBO things. Cancel that, move on to Pr…

> I might just start subscription hopping for a while. Aren't you worried about how this will look on your resume?

> I might just start subscription hopping for a while.

>> Aren't you worried about how this will look on your resume? @halgir

You jest, but this type of censorship is coming to a business near you in the very-near future.

Re: Spotify reducing employee base by about 6%

#154

Post by michaelbuckbee » Mon, Jan 23, 2023, 3:04 PM UTC

phamilton4 wrote: post #127

I get needing to keep a company lean and that businesses operate to make money... But most of these recent layoffs really make me feel uneasy. Spotify is a little different because AFAIK they are still operating at a negative net income, but still let's take a look at this. They're going to let go 600 people.. that's maybe an annual 90 million in savings (150k salary). The company's revenue is about 9 billion with -3…

My presumption is that it's both signaling to wall st to keep the stock price up (and for the C levels to keep their jobs) and also that companies did over hire in all sorts of weird ways in the last couple of years.

Re: Spotify reducing employee base by about 6%

#155

Post by marginalia_nu » Mon, Jan 23, 2023, 3:05 PM UTC

eloisant wrote: post #136

phamilton4 wrote: post #127

I get needing to keep a company lean and that businesses operate to make money... But most of these recent layoffs really make me feel uneasy. Spotify is a little different because AFAIK they are still operating at a negative net income, but still let's take a look at this. They're going to let go 600 people.. that's maybe an annual 90 million in savings (150k salary). The company's revenue is about 9 billion with -3…

The saving isn't that obvious because they might need to hire contracters (sometimes even the same worker) to make up for the lost workforce. Also severance packages are expensive! In addition to all the costs associated with a big layoff plan like this one.

Probably more about sending a message to anxious tech-shareholders than anything else. 2023 is not the right year for a tech investment to appear to hemorrhage money.

Re: Spotify reducing employee base by about 6%

#156

Post by shmatt » Mon, Jan 23, 2023, 3:05 PM UTC

phamilton4 wrote: post #127

I get needing to keep a company lean and that businesses operate to make money... But most of these recent layoffs really make me feel uneasy. Spotify is a little different because AFAIK they are still operating at a negative net income, but still let's take a look at this. They're going to let go 600 people.. that's maybe an annual 90 million in savings (150k salary). The company's revenue is about 9 billion with -3…

It's very naive to think these huge orgs don't have dead weight which is much bigger than 6%. If you start figuring some of your moonshot ideas aren't hitting their OKR's, you have a few options:

* Just let them keep doing whatever without delivering what they claim they can

* Create new moonshots for them just because

* Move them to other products, but that doesn't mean they'll create more value as an org with (now) double the people

So what ends up happening is re-orgs which actually mean shutting down some failed ideas, moving the high performers to other products, moving low performers out of those products, then firing people who were left without a team.

Plus you need to take into the equation an assumption that because of how things look right now, natural attrition will be almost 0 in the next year or 2. If you're used to 5% of people leaving on their own per year, assume its closer to 0% for 2023 and 2024

This is way beyond the cynical claim that this keeps the stock up for another 2 months before it goes down again. There are teams delivering nothing. There are teams delivering 90% of the companies income. You can't just decide not to fire anyone, move 100% of the employees to the 90% income team, and think that income will grow just because more people work there now

Now, do these companies do it right? really finding the good people and keeping them, and removing the weaker people, thats up to debate

Re: Spotify reducing employee base by about 6%

#157

Post by karl11 » Mon, Jan 23, 2023, 3:05 PM UTC

phamilton4 wrote: post #127

I get needing to keep a company lean and that businesses operate to make money... But most of these recent layoffs really make me feel uneasy. Spotify is a little different because AFAIK they are still operating at a negative net income, but still let's take a look at this. They're going to let go 600 people.. that's maybe an annual 90 million in savings (150k salary). The company's revenue is about 9 billion with -3…

Revenue is irrelevant when looking at savings, you have to look at net revenue or gross margin. Majority of Spotify’s revenue goes to record labels. If you are making -40mm / yr then a $90mm swing is a huge deal.

Also, can’t just look at salary - employees cost a lot more than their salary. 10% employer tax, health care, other ancillary benefits, IT equipment / space, etc. A $150k salary probably costs the company $250k all in.

Re: Spotify reducing employee base by about 6%

#158

Post by popularrecluse » Mon, Jan 23, 2023, 3:05 PM UTC

paulcole wrote: post #108

honeybadger1 wrote: post #39

Earlier quoted context omitted.

Just turn off your internet services if you don't want to fund differing points of view.

You can be OK funding differing points of view but not OK funding a specific differing point of view.

We just live in a world now where propagating false and dangerous misinformation is merely offering a differing point of view.

We were happy to let subject-matter experts help build the modern world, but then turn on them as we seek out the information that comports with the way we wish the world to be. It's good to be skeptical, but a very significant portion of the population has serious epistemic deficiencies.

Re: Spotify reducing employee base by about 6%

#159

Post by defaultcompany » Mon, Jan 23, 2023, 3:06 PM UTC

eigen-vector wrote: post #32

This is probably the least tactical message amongst all the companies that have laid off people. Ek's spent most of the time rambling about efficiency and organizational changes to leadership positions who'll be least affected by the layoffs. Then comes the layoff news. It's almost as if he's rectifying someone else's mistake and everyone getting laid off should be thankful about it. I wish CEOs read some of the emai…

It did seem a bit tone deaf but five months baseline severance is no joke.

Re: Spotify reducing employee base by about 6%

#160

Post by nytesky » Mon, Jan 23, 2023, 3:07 PM UTC

phamilton4 wrote: post #127

I get needing to keep a company lean and that businesses operate to make money... But most of these recent layoffs really make me feel uneasy. Spotify is a little different because AFAIK they are still operating at a negative net income, but still let's take a look at this. They're going to let go 600 people.. that's maybe an annual 90 million in savings (150k salary). The company's revenue is about 9 billion with -3…

The layoffs aren’t about actually saving the cost of those specific employees.

Instead, the threat of being laid off is being used as a stick to bring the remaining employees in line — productivity has been lower the last few years, and leadership has no real way to measure on an individual level or how to improve it, so putting the pressure on employees is a tried and true tactics.

Further, they can make lower TC offers to future employees, and give lower raises, pointing to the “need” to do so as demonstrated by earlier layoffs.

So you lay off 6% but freeze the wages of the remaining 94% (who are grateful to have a job rather than carping about wages not tracking inflation) — big savings.