6 ms·

Spotify CEO Daniel Ek surprised by how much 1,500 layoffs' impacted operations

40 points by monkin 2y ago

gjvc 2y ago
"Although there’s no question that it was the right strategic decision, it did disrupt our day-to-day operations more than we anticipated." Absolute double-speak. Translation "Although it was clearly a dumb thing to do we are now fucked and full of bitter regret and embarrassment. Also, check out my shades."
exabrial 2y ago
I'm blown away that company _needs_ more than 1,500 employees in the first place...
- idontwantthis 2y ago
  Me too. I’m not aware of a single change they’ve made in ten years. Offline still doesn’t really work. I’m sure there’s been tons of scaling work, but why does that require thousands of employees?
  - husarcik 2y ago
    Scaling Spotify seems like it'd be much easier than a video based streaming platform. Maybe scaling their recommendation algorithm? Not sure.
    - piva00 2y ago
      There are music videos on Spotify these days.
  - dewey 2y ago
    User facing changes are usually the tip of the iceberg for most mature companies. Feels very naive to judge a large company that deals with complicated licensing, sales, marketing by some pet peeve feature you are missing in the app.
    - jinushaun 2y ago
      Not really. The engineering roadmap of large public companies optimize one thing: stock price. Gone are the days of working on features that benefit the user. That’s called enshittification
      - dewey 2y ago
        It feels like everyone learned the new word "enshittification" this year and is just using it in any context possible.
  - piva00 2y ago
    Ten years ago was 2014, there's been a lot of changes to Spotify in 10 years, not even just in types of content (podcasts, audiobooks, music videos) but the whole recommendation system, daily playlists, discovery playlists, lyrics, even banal things like playlists folders didn't exist 10 years ago. There's also a lot of scaling into new markets they didn't have presence in 2014 (which requires scaling in billing, legal, accounting, etc.).
- udev4096 2y ago
  Exactly. Just look at Telegram. They have a team of ~30 engineers who are managing ~900 million monthly active users. That's wild
  - adamors 2y ago
    What exactly? They didn't lay off 1500 engineers, I would imagine the bulk of Spotify employees handle all sort of licensing deals, talent management, ad sales etc. Telegram is a chat application that does none of this.
  - piva00 2y ago
    They don't have to deal with the legal aspects of licencing content, nor need to do marketing, nor sales, nor have specialised teams working for features in specific markets; They don't have to ingest content, match content with potential existing ones to pay royalties properly (if not you get legally fucked), they don't have to do any kind of recommendations, so on and so forth... I think you have a very simplistic view of how businesses work since your comparison is not even wrong.
  - rebolek 2y ago
    So that's why telegram is swamp filled with hate and bullshit.
- busterarm 2y ago
  I feel similarly about Reddit and pre-X Twitter.
- rapsin4 2y ago
  Sales, marketing, customer service? Neckbeards apparently only think of themselves lol.
- brigadier132 2y ago
  I think when you hire them they make themselves useful which is the problem. If you stay small you solve problems using solutions in ways that small teams can manage.
- dewey 2y ago
  I‘m always blown away by HN commenters that think any sufficiently large company can be run by a few engineers. Offices in many countries, licensing, marketing, sales, growth, data, design, engineering all adds up quickly.
- r00fus 2y ago
  Supplier management sounds crazy. How many artists and labels exist in how many countries? How many contracts? I'd expect that to be a non-trivial, not-automatable business critical task that requires lots of bodies.
  - zimpenfish 2y ago
    > I'd expect that to be a non-trivial, not-automatable business critical task that requires lots of bodies. From my brief but traumatising stints working with companies dealing with music, yes, it is a clusterfuck of nonsense that requires industry knowledge, contacts, etc. and only parts of it are amenable to automation (not the important bits, either.)
  - saaaaaam 2y ago
    Spotify (surprisingly) doesn’t deal with many artists or labels directly, and music is delivered against an industry-code schema that contains all the metadata (ok, most of the metadata) needed to attribute usage and route payments. That happens via a bunch of intermediary aggregators/distributors and a decent part of this automated/automatable. As I understand it a lot of the staffing overhead at Spotify is in product and marketing - and R&D efforts for retention/acquisition. It also seems like these were a lot of the folk laid off which then impacts growth/retention.
- ryandvm 2y ago
  Wait until you find out about Postman
srajabi 2y ago
https://archive.is/L0BdY https://archive.is/L0BdY Summary: * Spotify’s Layoff Impact: CEO Daniel Ek was surprised by the significant operational challenges following the layoff of 1,500 employees. * Financial Performance: Despite achieving record profits of €168 million and revenue growth, Spotify missed its targets for profitability and user growth. * Investor Reaction: Shares increased by over 8% after the earnings report, reflecting investor confidence. * Long-Term Strategy: Despite short-term issues, Spotify believes the layoffs were necessary for long-term profitability.
locopati 2y ago
How does a CEO not understand the employment needs of his company? Oh, right, he's playing stock price games with the investors and doesn't give a shit about his employees.
- stantaylor 2y ago
  This is about as close as you'll ever get to a CEO actually admitting that doing layoffs for the sake of the short-term (lol as if that even needs to be stated) stock price actually had a negative business impact. I once worked for a public company that panicked if it looked like the company wasn't going to meet its quarterly earnings projection. All the actions that the company took--layoffs, getting rid of contractors (also layofs), making employees take banked PTO--for this short-term benefit negatively affected the company's ability to meet its longer-term goals. It was infuriating.
leosanchez 2y ago
I was curious what jobs were impacted. Looks like plenty of SWE were fired: From layoffs.fyi: https://docs.google.com/spreadsheets/d/1KPL87R3veJ6HaQeHdkG1BPbKY-K-G4Gr7y0m7oMRCqU/htmlview https://docs.google.com/spreadsheets/d/1KPL87R3veJ6HaQeHdkG1...
deleted 2y ago
[deleted]
rsynnott 2y ago
Wait, so if you fire the people who do the work, the work doesn't get done?! Well I never. Who'd have thought it? Sometimes I'm just baffled, I really am.
- gscott 2y ago
  You will never make it as a big company CEO!

40 points by monkin 2y ago

gjvc 2y ago

"Although there’s no question that it was the right strategic decision, it did disrupt our day-to-day operations more than we anticipated." Absolute double-speak. Translation "Although it was clearly a dumb thing to do we are now fucked and full of bitter regret and embarrassment. Also, check out my shades."

exabrial 2y ago

I'm blown away that company _needs_ more than 1,500 employees in the first place...

idontwantthis 2y ago
Me too. I’m not aware of a single change they’ve made in ten years. Offline still doesn’t really work. I’m sure there’s been tons of scaling work, but why does that require thousands of employees?
- husarcik 2y ago
  Scaling Spotify seems like it'd be much easier than a video based streaming platform. Maybe scaling their recommendation algorithm? Not sure.
  - piva00 2y ago
    There are music videos on Spotify these days.
- dewey 2y ago
  User facing changes are usually the tip of the iceberg for most mature companies. Feels very naive to judge a large company that deals with complicated licensing, sales, marketing by some pet peeve feature you are missing in the app.
  - jinushaun 2y ago
    Not really. The engineering roadmap of large public companies optimize one thing: stock price. Gone are the days of working on features that benefit the user. That’s called enshittification
    - dewey 2y ago
      It feels like everyone learned the new word "enshittification" this year and is just using it in any context possible.
- piva00 2y ago
  Ten years ago was 2014, there's been a lot of changes to Spotify in 10 years, not even just in types of content (podcasts, audiobooks, music videos) but the whole recommendation system, daily playlists, discovery playlists, lyrics, even banal things like playlists folders didn't exist 10 years ago. There's also a lot of scaling into new markets they didn't have presence in 2014 (which requires scaling in billing, legal, accounting, etc.).
udev4096 2y ago
Exactly. Just look at Telegram. They have a team of ~30 engineers who are managing ~900 million monthly active users. That's wild
- adamors 2y ago
  What exactly? They didn't lay off 1500 engineers, I would imagine the bulk of Spotify employees handle all sort of licensing deals, talent management, ad sales etc. Telegram is a chat application that does none of this.
- piva00 2y ago
  They don't have to deal with the legal aspects of licencing content, nor need to do marketing, nor sales, nor have specialised teams working for features in specific markets; They don't have to ingest content, match content with potential existing ones to pay royalties properly (if not you get legally fucked), they don't have to do any kind of recommendations, so on and so forth... I think you have a very simplistic view of how businesses work since your comparison is not even wrong.
- rebolek 2y ago
  So that's why telegram is swamp filled with hate and bullshit.
busterarm 2y ago
I feel similarly about Reddit and pre-X Twitter.
rapsin4 2y ago
Sales, marketing, customer service? Neckbeards apparently only think of themselves lol.
brigadier132 2y ago
I think when you hire them they make themselves useful which is the problem. If you stay small you solve problems using solutions in ways that small teams can manage.
dewey 2y ago
I‘m always blown away by HN commenters that think any sufficiently large company can be run by a few engineers. Offices in many countries, licensing, marketing, sales, growth, data, design, engineering all adds up quickly.
r00fus 2y ago
Supplier management sounds crazy. How many artists and labels exist in how many countries? How many contracts? I'd expect that to be a non-trivial, not-automatable business critical task that requires lots of bodies.
- zimpenfish 2y ago
  > I'd expect that to be a non-trivial, not-automatable business critical task that requires lots of bodies. From my brief but traumatising stints working with companies dealing with music, yes, it is a clusterfuck of nonsense that requires industry knowledge, contacts, etc. and only parts of it are amenable to automation (not the important bits, either.)
- saaaaaam 2y ago
  Spotify (surprisingly) doesn’t deal with many artists or labels directly, and music is delivered against an industry-code schema that contains all the metadata (ok, most of the metadata) needed to attribute usage and route payments. That happens via a bunch of intermediary aggregators/distributors and a decent part of this automated/automatable. As I understand it a lot of the staffing overhead at Spotify is in product and marketing - and R&D efforts for retention/acquisition. It also seems like these were a lot of the folk laid off which then impacts growth/retention.
ryandvm 2y ago
Wait until you find out about Postman

srajabi 2y ago

https://archive.is/L0BdY https://archive.is/L0BdY Summary: * Spotify’s Layoff Impact: CEO Daniel Ek was surprised by the significant operational challenges following the layoff of 1,500 employees. * Financial Performance: Despite achieving record profits of €168 million and revenue growth, Spotify missed its targets for profitability and user growth. * Investor Reaction: Shares increased by over 8% after the earnings report, reflecting investor confidence. * Long-Term Strategy: Despite short-term issues, Spotify believes the layoffs were necessary for long-term profitability.

locopati 2y ago

How does a CEO not understand the employment needs of his company? Oh, right, he's playing stock price games with the investors and doesn't give a shit about his employees.

stantaylor 2y ago
This is about as close as you'll ever get to a CEO actually admitting that doing layoffs for the sake of the short-term (lol as if that even needs to be stated) stock price actually had a negative business impact. I once worked for a public company that panicked if it looked like the company wasn't going to meet its quarterly earnings projection. All the actions that the company took--layoffs, getting rid of contractors (also layofs), making employees take banked PTO--for this short-term benefit negatively affected the company's ability to meet its longer-term goals. It was infuriating.

leosanchez 2y ago

I was curious what jobs were impacted. Looks like plenty of SWE were fired: From layoffs.fyi: https://docs.google.com/spreadsheets/d/1KPL87R3veJ6HaQeHdkG1BPbKY-K-G4Gr7y0m7oMRCqU/htmlview https://docs.google.com/spreadsheets/d/1KPL87R3veJ6HaQeHdkG1...

deleted 2y ago

[deleted]

rsynnott 2y ago

Wait, so if you fire the people who do the work, the work doesn't get done?! Well I never. Who'd have thought it? Sometimes I'm just baffled, I really am.

gscott 2y ago
You will never make it as a big company CEO!