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Spotify will reduce total headcount by approximately 17%

newsroom.spotify.com

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Re: Spotify will reduce total headcount by approximately 17%

#311

Post by deelowe »

myspy wrote: post #286
deelowe wrote: post #265

Earlier quoted context omitted.

Nonsense. You didn't address my point... Tech is disproportionately affected by rate changes (both inflation and loans/bonds), as it's the highest growth sector. High growth businesses are investing heavily in infrastructure and as such are also highly leveraged.

Well vice versa great answer. Who planed and executed a strategy like this and why isn‘t it done in a way to not get as much employees which would lead into them getting laid off? Why getting cheap money without taking into account that the situation is different in 5 years? I couldn’t care less that growth businesses run into this situation. Then don‘t grow it so fast! People are getting fired across so many busines…

What? I addressed your comment. I'll make it simpler: you are spouting nonsense.

Spotify didn't "plan and execute" anything. The current situation was brought on by 2 decades of quantitative easing and then multiple black swan events and even more cash injection until it all came crumbling down. The amount of blame you place on the board of a single company to combat what is essentially a global crisis brought on by actions taken by world governments is extremely naive. Spotify isn't alone in this. Nearly every big tech company has had layoffs and I don't think we're anywhere close to being done yet. I hear rumors more are coming for mamaa.

Re: Spotify will reduce total headcount by approximately 17%

#312

Post by Mindwipe »

ianwalter wrote: post #306

Instead of investing in massive podcaster deals, they should have just focused on integrating podcasts into the app in a sane way. I would pay more if it were as good as Pocket Casts, but it's nowhere close.

The whole point was to move into podcasts for exclusivity so they had something they could put behind a hard paywall to boost revenue - the music service will never be significantly profitable and will probably never be genuinely profitable at all, so they need to move into another area or they will eventually collapse.

Re: Spotify will reduce total headcount by approximately 17%

#313

Post by thomastjeffery »

byyll wrote: post #248

Can someone explain to me why a company that is about streaming mp3s needs 9500 employees? That just sounds extremely inefficient to me. They don't even have native desktop apps.

The magic word is "growth".

For context, I find this artist's explanation of the situation helpful: https://www.youtube.com/watch?v=gDfNRWsMRsU

Re: Spotify will reduce total headcount by approximately 17%

#314

Post by Mindwipe »

selfmodruntime wrote: post #274
glimshe wrote: post #245

Earlier quoted context omitted.

They are likely not charging enough for their costs. A lot of unsustainable businesses are like that. Users love it because of the low prices and high perceived value - think Uber.

An alternative viewpoint: Their costs are too high for what they can reasonably charge. Hence the layoffs. They could probably cut half of their workforce.

Their workforce is a fairly small part of their costs.

Re: Spotify will reduce total headcount by approximately 17%

#315

Post by School-Cotton »

rob74 wrote: post #88
hackernewds wrote: post #43

Earlier quoted context omitted.

sure, but call a spade a spade instead of making the layoffs seem mandatory. there are inputs to financial goals - including executive greed.

Or stock market greed... of course, if you subscribe to the "greed is good" school of thought, you may also see that as positive.

Not sure if I’d go so far as saying “greed is good”, but if it weren’t for the expectation by investors that companies would attempt to be as profitable as possible, companies like Spotify wouldn’t exist.

Re: Spotify will reduce total headcount by approximately 17%

#316

Post by camillomiller »

kibwen wrote: post #303
candiddevmike wrote: post #296

Earlier quoted context omitted.

More and more it seems they're an advertising company that also serves music and podcasts. I keep seeing sponsored recommendations and I'm a premium subscriber, for now.

Seemingly every company in the "tech" industry is just an advertising company shambling around in the rotten skin-suit of a legitimate business.

Not Apple, IBM, Microsoft and many other that don’t make money as data merchants

Re: Spotify will reduce total headcount by approximately 17%

#317

Post by realusername »

hasoleju wrote: post #229
FirmwareBurner wrote: post #202

Looks like Benn Jordan's analysis on how Spotify will fail is slowly starting to materialize: https://www.youtube.com/watch?v=gDfNRWsMRsU

I'm a heavy user of spotify. Almost everyone I know uses it daily. I don't understand why they are not able to turn this much engagement into profit.

> I don't understand why they are not able to turn this much engagement into profit.

They will never be able to, regardless of how much they pricing the platform, the music majors will renegotiate and ask all of their profits.

Re: Spotify will reduce total headcount by approximately 17%

#318

Post by dijit »

kranke155 wrote: post #301
dijit wrote: post #282

Reminds me of: "Nobody ever got fired for buying cloud". Spotify was a stand-out, almost no large tech company bought into cloud like they did, and everyone said the same thing: "It's not our core competence, it would require more people". I get it, it's not sexy at all to deal in infrastructure, but I've seen their cloud bill and it's significantly higher than 1,600 peoples jobs, even with the discounts they got thr…

How big is the difference in your estimate, between the bills they have now vs cost of cloud + staff to support it?

Largely depends.

For ML workloads anything between 6-8x cost increase for using cloud.

For CDN costs somewhere like 3x (they're pretty smart on discounts here, without those it could be 100's of x)

For compute somewhere like 3-4x (would be 6x before the discounts)

Managed DB is a hard one because the cost is really high but I'm not 100% sure how much time is saved with the solution they chose because while I saw the bill I don't work there.

It gets dicey with humans because it's apples to oranges, expensive SRE's who understand the inner-workings of cloud vs cheap(er) hardware folks who set things up from first principles with a higher up-front cost. -- FinOps with more traditional solutions is easier but you still need people for that.

Spotify's backend load is not entirely elastic. There are some elastic bits but a large chunk is pretty static.

Re: Spotify will reduce total headcount by approximately 17%

#319

Post by ctvo »

dijit wrote: post #282

Reminds me of: "Nobody ever got fired for buying cloud". Spotify was a stand-out, almost no large tech company bought into cloud like they did, and everyone said the same thing: "It's not our core competence, it would require more people". I get it, it's not sexy at all to deal in infrastructure, but I've seen their cloud bill and it's significantly higher than 1,600 peoples jobs, even with the discounts they got thr…

Where in the article did you see cloud costs being the reason for this layoff?

> Spotify is cutting almost 1,600 jobs as the music streaming service blamed a slowing economy and higher borrowing costs in the latest round of redundancies at big tech companies.

It clearly states later that in a zero interest environment Spotify borrowed heavily and over hired, in this environment it’s no longer sustainable and they had to let employees go.

Did you just assume “costs” meant infrastructure costs like cloud?

Re: Spotify will reduce total headcount by approximately 17%

#320

Post by dijit »

blcknight wrote: post #309
dijit wrote: post #282

Reminds me of: "Nobody ever got fired for buying cloud". Spotify was a stand-out, almost no large tech company bought into cloud like they did, and everyone said the same thing: "It's not our core competence, it would require more people". I get it, it's not sexy at all to deal in infrastructure, but I've seen their cloud bill and it's significantly higher than 1,600 peoples jobs, even with the discounts they got thr…

Finding people who can run infra at Spotify scale isn’t easy. Even if they could find those people, it tough to leave aws (by design). They could’ve been more careful about avoiding lock-in by building more on something like kube but most startups don’t have that foresight, and the expense of moving to on-prem is compounded even more when they have so much wrapped up in the aws ecosystem.

They've already managed a switch from AWS to Google Cloud once in their past.
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