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Spotify reducing employee base by about 6%

newsroom.spotify.com

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Re: Spotify reducing employee base by about 6%

#161

Post by achiang »

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…

You need to use the fully loaded cost of an employee when estimating opex savings, which includes health care costs, retirement funding, etc.

Rule of thumb is that fully loaded cost for US employees is approximately 2x yearly salary (although people who've actually run a company can correct my potentially stale or incorrect understanding).

Re: Spotify reducing employee base by about 6%

#163

Post by MAGZine »

gfdsgfsdgfs wrote: post #115
nrook wrote: post #95

The tide is turning; tech owners are attempting to curtail the high costs of labor in the software industry. The only way for labor to fight back is to stand together and form a union.

Unions often have coasters and quiet quitters. As an experienced developer I would never work with people like that.

you'd rather work harder and for less money than work with people who phone it in?

I don't really buy the meritocracy argument that 'good devs get paid more'. It hasn't really panned out in my experience, except for less than 1%, probably closer to .1% of devs who are really, truly exceptional AND will fight aggressively for their keep.

Re: Spotify reducing employee base by about 6%

#164

Post by woeirua »

This is an unpopular opinion, but history from the DotCom crash tells us that the layoffs are just getting started. Turns out you can’t run at a loss forever, and when the going gets rough the fastest way to increase profitability is to cut costs.

Say what you will about Elon and Twitter, but he definitely proved that the majority of the engineers at Twitter were adding no value to the company. That is probably true at _all_ of the large tech companies.

If you work at a tech company make sure you have at least 6 months of liquid savings set aside for a rainy day.

Re: Spotify reducing employee base by about 6%

#165

Post by maxwell »

default_png wrote: post #142
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…

Thing is though, I have probably thrown 3K into Spotify, If I cant get a "Flat rate subscription for All / Most of the music out there" - > I will 100% just go back to downloading discographies of the artists I like. People saying "Support the artists" - I don't care about the artists, I just want to listen to whatever takes my fancy, and if they can't do that at my price point, they will end up getting nothing from…

What is your price point?

Why would artists give anything to you?

Re: Spotify reducing employee base by about 6%

#166

Post by cbm-vic-20 »

polygotdomain wrote: post #101

I think we've gotten into this weird spot where tech companies are almost goading each other into layoffs. I don't doubt that there was some overexpansion during COVID, but it seems to have shifted. Tech companies have signaled to the market that staffing numbers were too high (regardless of profitability), and that investors want to see them brought back down. These layoffs don't really seem to be an indication of c…

If not goading, they're at least providing some cover for each other. If a company is looking to cut some percentage of staff, it's best to tuck that into the news cycle when many of your peers are doing the same thing.

Re: Spotify reducing employee base by about 6%

#167

Post by mattbrewsbytes »

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…

I think what we don't see talked about is the avoidance of continuing to take on debt when interest rates are much higher than in recent past. Companies can issue bonds to raise money instead of loans but both are based on interest rates.

Companies pulling back on growth investments will help their bottom line sooner. For tech companies their greatest cost is employees which also is where they invest for more growth in new products/services.

Cash flow is king when interest rates are high.

Re: Spotify reducing employee base by about 6%

#168

Post by saurik »

scarface74 wrote: post #134
jzb wrote: post #93

I dunno, maybe if Spotify wasn't spending hundreds of million on podcast deals and actually focusing on what its users want, they wouldn't need to lay people off. Any way you slice it, there's no way that the Rogan deal pays for itself. Spotify is stingy AF with the artists that drove people to the service, and then firehoses Rogan with cash and tries to shove podcasts down people's throats. I was a happy Spotify sub…

Streaming music has always been a very bad business. No matter how much Spotify grows, it will only make 30% gross margins. Almost the definition of a tech company is one that has high fixed costs and low to almost 0 marginal cost and can take advantage of scale. Spotify doesn’t have that. At least with podcasts, they don’t have to pay a third party for each additional user. Spotify suffers from the “Dropbox problem”…

Anyone can build and add Dropbox-like functionality to their product suite (and I was even involved in a couple such efforts a while back)... but Spotify is not at all like that, in that not only is having the music licenses they have more than just some engineering work, people bring their music to Spotify, and so you can't even have a few ins and a major investor and then try and quickly get the same licenses to have the same service as you would still be missing essentially all of the music I listen to on Spotify.

Re: Spotify reducing employee base by about 6%

#169

Post by eigen-vector »

shmatt wrote: post #156
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)…

Presumably they already have performance processes that eliminate "dead weight". Be assured that layoffs never really mean that usual performance bases firings are paused. It's pretty much always happening on top of existing performance processes.
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