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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%

#211

Post by fulltimeloser »

I hope we can keep companies like original Spotify around, where I can find almost all the music I want to listen to. I wish companies could keep a limited scope for their offerings and just be really good at just that.

Spotify's focus on pod cast is kind of crap. It's like TV eras cheap production value reality shows from late 1990ths all over.

I guess the capitalist mantra of perpetual growth is leading them down another path.

Netflix used to be my go to site for film, now there are so many to streaming services choose from I don't know where to start. And they mainly focus on making series, which I'm not a big fan of.

Looks like Spotify will follow the money and hollow out their original service to be another junk site for vapid entertainment and easy money.

Re: Spotify reducing employee base by about 6%

#212

Post by MuffinFlavored »

karl11 wrote: post #157
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 $2…

What does laying off 600 people do to their net revenue/gross margins?

Re: Spotify reducing employee base by about 6%

#213

Post by guelo »

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…

Hey those 90 million will help pay for Joe Rogan's 200 million.

Re: Spotify reducing employee base by about 6%

#214

Post by oxfordmale »

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)…

It is also naive to think layoffs effectively target dead weight. As more extensive layoffs are often decided by senior management rather than team leaders, such releases have a high signal-to-noise ratio.

Natural attrition will also not be close to 0 in the next year or 2. Even if the markets stay stagnant, there will be the usual musical chairs turnover (a Facebook employee joining Google replacing a Google employee who joined Facebook).

Re: Spotify reducing employee base by about 6%

#215

Post by phamilton4 »

CydeWeys wrote: post #204
WastingMyTime89 wrote: post #193

Earlier quoted context omitted.

> Also I suspect that $150k as the mean TC of those being let go is low. Probably not low. It's an enormous salary for a developer outside of the Valley and Spotify has plenty of employees which are not in the USA.

Levels.fyi supports me at least: https://www.levels.fyi/companies/spotify/salaries

I commented above, whether the salary is 150k, 250k, 500k... the impact doesn't change 0.1%, 0.2%, 0.33%. Not sure it really matters. Again I'm not defending lazy employees or saying employers are bad for doing this. I feel there is a hidden cost of layoffs from my own experience of being at a company doing round after round of layoffs.

Re: Spotify reducing employee base by about 6%

#216

Post by ben7799 »

MAGZine wrote: post #151
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…

Artist revenues on streaming have been dropping substantially over the years, not increasing as the companies get larger. There is no shortage of artists talking about what a joke the payments have become.

If Spotify can't make money after cutting royalties 50% over the last 3-4 years how can that possibly work?

Realistically Spotify is a whole bunch of people making a lot of money as middlemen, but they can't seem to figure out how to actually make money.

Re: Spotify reducing employee base by about 6%

#217

Post by MuffinFlavored »

nytesky wrote: post #160
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 of…

> productivity has been lower the last few years

Any statistics to back that up? I've read both narratives (this one and the one that conflicts it) countless times over the Internet the past few years. I have no idea what is true.

A lot of people defend work from home and say it makes people more productive/work more overall. If that were the case, why are some of the brightest companies like Google/Apple against it?

Re: Spotify reducing employee base by about 6%

#218

Post by dmitriid »

capableweb wrote: post #174

As a long time user of Spotify (almost two decades in a couple of years...), this is my biggest gripe with Spotify: https://i.imgur.com/wfSka2H.png More and more playlists are starting to look like this, which is starting to piss me off. I don't really care if it's the record companies fault or whoever, and I blame 100% myself for getting into this situation in the first place. Started to use Bandcamp more and more l…

> I don't really care if it's the record companies fault or whoever, and I blame 100% myself for getting into this situation in the first place.

Interestingly that in a situation where it's 100% copyright holders who are at fault, you say that you 100% blame yourself, but in reality you blame Spotify be cause that's your biggest gripe with it.

Somehow no one ever blames the three-four companies (see https://en.wikipedia.org/wiki/Music_industry#Consolidation) that hold 90% of the world's recorded music hostage.

Re: Spotify reducing employee base by about 6%

#219

Post by oxfordmale »

karl11 wrote: post #157
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 $2…

The cost picture is as follows:

money saved on staff reduction - money spent on layoff packages - (temporary reduction in productivity, because of lower staff morale)

Research shows there is no long-term benefit of layoffs other than the short-term gain in cash flow. Layoffs are only beneficial if they are needed for survival of the company

Re: Spotify reducing employee base by about 6%

#220

Post by thehappypm »

oxfordmale wrote: post #219
karl11 wrote: post #157

Earlier quoted context omitted.

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 $2…

The cost picture is as follows: money saved on staff reduction - money spent on layoff packages - (temporary reduction in productivity, because of lower staff morale) Research shows there is no long-term benefit of layoffs other than the short-term gain in cash flow. Layoffs are only beneficial if they are needed for survival of the company

Lower productivity is highly questionable.

I’ve really only seen layoffs boost productivity. Suddenly there is less overhead and fewer cooks-in-the-kitchen.

Morale hits are real, but tend to fade if people feel confident that they’ve survived another day.

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