I didn’t know they have that many people (9000) to work for a single product. I’ve been a subscriber for more than 5 years and the app on the iPhone just gets worse everyday. Why?
- daily updates is gone. This is where I can get a snapshot of all new releases from artists I love. I’m not sure if Release Calendar is the new one but I don’t bother to check.
- I listen to classical and the song title naming is just subpar. For example, “Well-tempered Clavier, Book 1, J.S Bach, Angela Hewitt, Prelude in C Major is too long to be in the title. Especially, the rat if the album is just a repeat alternate between prelude or fugue and the chord.
- recently play list stopped syncing between my phone and my desktop app after 2022 for some reason. Is it a bug or they just stop doing this since it costs more to sync?
I probably won’t switch to a different stream service for now as there is not much differences for me to migrate.
Every damned time this happens someone asks how it's possible they have so many employees when it's just an app... Spotify owns multiple large podcast studios, has sales people, negotiators, music industry people, lawyers, facility staff, lawyers, marketing, content curators. It is the business engine through which the vast majority of the world consumes music these days. You can quibble about if they have too many engineering employees, but at least get the real number first.
Spotify's issues and costs are royalty payments. Of the €567 million increase in cost of revenue for the Nine months ended September 30, 2023, higher royalty costs were €534 million of that total. (~94%) [1] This delta is vs 7,159 total cost of revenue on 9,576 of revenue (€millions).[1, pg4] From looking at the rest of the report, most other cost of revenue contributors are minor (5 here, 10 there).
In the total category, R&D (1,257), S&M (1,101), G&A (430). R&D trending up, possibly plateauing, S&M, G&A trending down. [1, pg4] All relatively minor compared to 7,159. (<=1/6)
R&D increased as a % of revenue YOY. I think the increased cost of revenue is part of the story, the other being salaries and benefits rolling up to R&D
The R&D expense is fully within their control, while things are a bit more complex with licensing costs.
This seems false, Whatsapp became 'the business engine through which the vast majority of the world' sends texts on the backs of 20ish employees.
Even assuming delivering music, podcasts, royalty payments, negotiations with artists, etc..., takes 100x more headcount in total, that should still be only around 2000 employees.
9000 just means most are not being that productive.
Obviously you can do it leaner, if they couldn't they wouldn't be firing people. My point is that you shouldn't be trying to estimate based on the technical side when most of the head count is negotiating with record companies and producing podcasts. In any case I personally wouldn't be so obsessed with every company running as lean as possible, great way to have 5 people make 10 billion dollars and everyone else just gets to pound sand. In a healthy society companies should run fat to keep people employed, engaged, trained up, ready to fill in as a replacement, and lots and lots of vacation time.
agreed. the population has probably passed an inflection point where bureaucracy is at its peak, crosscutting concerns are unavoidable, and communication chains too long and winding to be considered communication at all. but we’re talking of the genetrix of some of the modern modes of organizing work and workers. i'm more hopeful that they’ll be able to do the right thing, even if it doesn’t mean reducing workforce to the irreducible minimum.
Always nice to see Apple Music Classical mentioned on here. I was one of the lead engineers building things before the acquisition and to my knowledge they still use tooling I built around automation of audio ingestion. Streaming music was a fascinating industry to work in
I was using Apple Classical happily for ~1 month, then it stopped working. It would load all the metadata and let me browse around but when trying to play a song it wouldn't progress.
I restarted my phone, reinstalled the app, went through several iterations of iOS updating, the problem never went away. No other app, including Spotify, has this issue on my phone. After a month of paying for Apple Music without Classical working I shrugged and unsubscribed. Big loss for me, and for them, since I am exactly their target audience with Apple Classical.
Does any other brand have something similar to Apple's support? I was kinda surprised to see that you could get called back as easily as I did. Or that their stores could quickly fix e.g. a bricked bootloader. The Windows/Android devices I had before had nothing like that.
Also not fantastic, how Apple handles multiple devices. I forgot how they call it, but registering new devices is a pain, especially if you have multiple Macbooks, iPads, iPhone, there’s an edge case where you have to wait 90 days before it starts streaming to your brand new iPhone.
You better reach out to their support, where they never acknowledge the issue but always fix it in 5 minutes.
Yeah, Apple has a remote app but you need to be on the same local network and connect to the remote library and then can't add stuff from Apple Music. It all feels so antiquated and inelegant.
Some people are complaining about Spotify UI/UX but at least they provide a lot of features and it works pretty well most of the time. I find the app more responsive and just overall better has a streaming player.
I subscribed to apple music for 5 years but then I just switched back to Spotify this year. It is just better.
That's the thing I loved most about Spotify. Unfortunately their "radio" sucks. It generates a 1 time playlist of 50 songs. Pandora has the shittiest interfaces ever, but it does a damn good job DJing for me. Most of the time, I just want to turn it on, pick a genre and let it go. I don't want to listen to the same 50 songs over and over in the same order.
I am quite steeped in the Apple ecosystem, but Apple's crude syncing behaviors and runaway AMPLibraryAgent bugs/invasiveness, has me quarantining Apple media software. Use of Spotify does not mangle my private music library.
It's noticeable that they're working with a much much smaller team than their competitors, and they occasionally roll out new bugs. On the other hand, they seem really dedicated and listen to the users. I've switched to Qobuz about five years ago and while I've had the occasional issue, I don't plan to move away from it. I usually get a personal reply to my bug reports (usually from the same guy -> small team! :D) and that tends to make me much more willing to support a company.
I think that beyond some relatively small number, engineering headcount functions as a demonstration of wealth - it doesn't actually make the product better, it doesn't make you ship faster (Brooks's law). but it makes you look big and important and justifies your market cap
I want to like this theory, and it seems like there is some social clout aspect to the phenomenon.
But, the bump these companies get in the stock market whenever they do a round of layoffs indicates the market cap is justified by what you would expect.
Exactly. VCs want to see growth by watching double the engineering headcount on every subsequent visit. It's ALL about optics and burning money for show. But the party is ending.
I have seen it first-hand - company opening a new floor to show growth, but it was half-empty.
> recently play list stopped syncing between my phone and my desktop app after 2022 for some reason. Is it a bug or they just stop doing this since it costs more to sync?
It's very much more than supporting 'one product'. Off the top of my head, regarding engineering, I can think of:
1. iOS App
2. Android App
3. Windows App
4. Microsoft App
5. Web App
6. Underlying API
7. Artist Portal/App
8. Advertising Portal/App
9. PlayStation App
10. Xbox App
There are probably entire engineering teams for each micro-service in the overall product (personalization, playlists, player, etc.).
> I didn’t know they have that many people (9000) to work for a single product.
Having had a wee insight into how it worked at Rdio (obligatory: I miss Rdio!), one big chunk of the answer is they need a literal army of lawyers.
A worldwide streaming music library is a hoard of licensing liabilities for every possible country, with deals that expire, renew and change hands daily on every possible mix of business days and holiday calendars.
As for the design and development headcount, I guess they dispatch teams and tasks as efficiently as Meta with their thousands of acqui-hired product people.
They keep changing the design of the app for the worse, just nonsensical stuff. Like how many UX design people do they have? Cause clearly they're just changing stuff to make themselves feel useful. The heart changing to a plus, what the fuck Spotify?
> they have that many people (9000) ... just gets worse everyday
As much as I hate to see layoffs from an empathization perspective, maybe this is the reason? Remember Brook's Law - adding manpower to a late project makes it later. Too many cooks spoil the broth and all that.
I can reccomend deezer. I switched away from spotify last year and ended up trying like 5 different options before settling on deezer. No complaints, great quality streams (lossless), can upload your own songs and their recommendations system is really good.
It's hundreds of "microservices". That's why they created Backstage.
You just need that many people if you are going to go that route. Unfortunately for them, once the economy goes from "stupid good" to "very good", it all starts falling apart.
It's unchecked complexity that at some point is going to destroy you.
And it can literally destroy them.
"From Unicorns to Zombies: Tech Start-Ups Run Out of Time and Money"
I may be in the minority here but I still enjoy the Joe Rogan Experience. As an avid listener the past 12 years I can tell you he is not "right wing" in any way. He was a liberal and believes the left "left him behind" when progressivism hijacked the democratic party. Most intellectually honest humans agree with him.
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 through committed use and even when considering the actual costs for infrastructure they need.
I'm sure there are inefficiencies everywhere, but this was the one that I talked about before and was talked down in a rather condescending tone. "Nobody got fired for buying cloud" is evidently a misnomer, because if you spend a lot of money and you don't have a lot of income: something has to give. And cloud has a lot more lock-in than most employees.
It's actually non-trivial to run an efficient cost center department that actually supports other departments properly. The incentive structures are just horribly difficult to align. Cloud's selling point is that you won't have to spend 6 months filling out forms to get a single out of date VM (yes, that happened to me).
Until you get the worst of both worlds and have to align an enterprise architecture approval committee, get cyber sign-off, put the request through your service desk, have it land with some sort of enterprise task prioritisation team, and finally land with your internal cloud team to action the request your team isn’t empowered to do, only to then have a simple service provisioning turn into a massively overcomplicated set of extra cloud bits and pieces getting provisioned and retemplated and secured and configured over the course of months, as that overallocated team find 20 minutes here or there only to hit some new wall as the cloud settings look different to the last time they did it or some unforeseen setting requirement was overlooked in the original request, leading to a two week lag on email responses and ticket handover before it gets picked up again.
That is why companies such as Spotify don't focus on cost savings as much as people here seem to think they should. A focus on cost savings inevitably means bureaucracy which means time spent on that instead of on product features. That means not just less growth for the stock markets but also more attrition due to good engineers hating the process. Of course at some point it's unsustainable but right until that moment it makes perfect sense.
edit: And that moment depends not just on costs but the growth rate of the company so it's almost impossible to predict ahead of time (otherwise wall street investing would be a lot more boring).
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?
A single engineer is 400k in total costs, and they hired thousands for initiatives that didn’t pan out. Thinking cloud costs come anywhere close to being a factor here is nonsense and not supported by anything in the article.
You extrapolated that costs meant cloud costs vs. them overhiring during the pandemic and investing in things like podcasts, which haven’t had the expected returns. You did this in an attempt to tie this back to some injustice that happened to you in a comment section far far away, which you’ve edited the post to remove now, thankfully.
1. I didn't edit my comment to remove anything like that, so I'm not sure what you're suggesting.
2. I didn't perceive injustice, I thought it was a bit brainless to not associate company costs with long term survivability.
3. An engineer being 400k TC is an anomaly, Spotify does not pay any of it's Swedish engineering force nearly that much, and since we don't know the demographics of the layoffs it's hard to argue engineers anyway. (Citation here says the avg was 125.000[0] which is still very high if these were europeans)
4. Their cloud bill would still be roughly 500 people based on that TC based on committed use alone.
5. Costs = Costs. Overspending in many areas = no more money. I'm merely suggesting that they overspent in one area that is now affecting another area indirectly. Yes, I drew a line.
> 3. An engineer being 400k TC is an anomaly, Spotify does not pay any of it's Swedish engineering force nearly that much, and since we don't know the demographics of the layoffs it's hard to argue engineers anyway. (Citation here says the avg was 125.000[0] which is still very high if these were europeans)
Are we going to ignore that on average their US engineers costs significantly more than ~400K total costs and they have an engineering hub in New York City?
> 4. Their cloud bill would still be roughly 500 people based on that TC based on committed use alone.
And they paid Meghan and Harry 20,000,000 USD for a podcast deal that didn't work out. That's 50 engineers. Should we look at the Rogan deal too and go through everything that didn't work out in the last 3 years?
You've provided no evidence that by not using the cloud Spotify would have made more money or prevented these layoffs. And costs is one thing: Could they have grown as quickly? Scaled as fast? Hired as easily? Without numbers, which you won't share (outside of "trust me I've seen it"), this becomes even harder to debate.
> Are we going to ignore that on average their US engineers costs significantly more than ~400K total costs and they have an engineering hub in New York City?
Yes, because you're asserting that:
A) That engineers who have been laid off have that TC.
B) That it's engineers we're talking about.
C) That it's mostly localised in NYC; a high CoL city by all metrics.
Their other spending is also shameful, it doesn't discredit other poor spending.
You're a little bit upset with me for some reason, I would surmise that you're feeling somewhat defensive, maybe you work for a cloud or you've skilled entirely into only being able to work with cloud. That's fine, but you need to understand financial constraints in business.
This is the side of business I am most knowledgeable about so I am qualified to have an opinion; situations like Harry and Meghan? Rogan? Not my area at all and it would be impossibly arrogant of me to assume I know anything at all about those situations.
Also: "trust me bro" is not my position, the way I saw the numbers is a grey area legally and I'm not sure any Spotify people want to chime in to clear it up because it's likely one thing that is under tight NDA.
For the record, I used Glass Door, checked mostly Stockholm, but Paris, Barcelona, and Helsinki all seems to be in a similar range.
which lists most roles (including managers and senior engineers) as making less than SEK 1M ($98k) per year, most in the $75-$87k range it seems. Add on office space and equipment and other costs of roughly $30k per year and you got something like the above number.
understandable, FWIW since I have numbers on these things from working in multiple companies it might be nice to map out where those extras actually go for other readers:
$500/mo for seat licensing (for developers) this includes: Git hosting/Copilot/Office Suit/IDE's/Figma/Slack etc;
$500-$1500/mo for office space (depends a lot, in my company a seat costs me $500/mo and I'm in the middle of the city- larger companies may pay even less but lets assume a very high cost since it's a tech company).
$50/m for preventative healthcare (friskvard in sweden; this is actually higher than the maximum tax-free value)
$100/m for non-preventative health insurance (IE; private healthcare)
$120~/m amortised cost of laptops (assuming $4000 macbook over 3 years and a screen amortised over 5)
5% monthly salary for pension, so, that varies a lot.
No, payroll tax is always included in salary numbers because the tax is _drawn_ from the salary, not added on top of it. In Sweden they always use gross numbers for salaries.
Yes, we use gross numbers for salaries but the gross salary value does not include social contributions, payroll taxes/fees paid directly to the government, the gross amount is just before income taxes. There are quite a few extras on top of the gross advertised salary which the company pays for and we employees don't even know about (it's not shown in payslips).
Glassdoor numbers will be gross of income tax, but not include employer social security contributions, which is 31.24% on top of what you see as listed gross salaries. That is his point.
Don't forget if you're doing back-of-the-envelope stuff that there is also 20.6% corporate tax on revenue that has originated in Sweden. And companies resident in Sweden are taxed on their worldwide income, although if they are taxed elsewhere then this elsewhere amount can be deducted. But this means you are paying at least that amount. I imagine some chunk of Spotify's workforce exists to optimise and figure out all of that, given the number of legislatures and tax environments they have subscribers in.
My point is that Swedish employees who input data into Glassdoor will have no idea about the extra social contributions, work insurances, and taxes paid by the employer that aren't available in your payslip. A payslip here only includes the gross salary without those add-ons, and so you aren't aware that your employer is paying some 50-70% on top of the gross salary you see in the payslip.
Maybe I've misunderstood what the parent comment meant so correct me if I'm wrong.
Payroll tax is paid by the employer, as opposed to income tax which is paid by the employee. Anyone disclosing their salary in Sweden will give their pre-income tax salary, payroll tax not included.
The cost of an employee is significantly more than their TC. It's a function of many resources, including compensation, hardware, space (real estate), corporate services, software licenses, taxes, etc.
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.
> Finding people who can run infra at Spotify scale isn’t easy.
You won't get any argument from me on that one, but it's worth remembering that it's also hard to find people who are able to run systems in the cloud cost effectively.
Not sure what "shoes shits money" means, but contextually they had $9.9B in revenue for the year 2022 and an operational expenditure of $9.4B.
I believe this means they generated $500m for bytedance, but I can't find a good citation, bytedance itself generated $6B in profits though for the fiscal year 2022
I would caution against drawing grand conclusions from these recent layoff rounds. Companies overhired during the pandemic, and now they are trimming that fat. It’s not necessarily a sign of any big strategic mistakes beyond “we hired too many people”
This is why I'm bullish about Oxide (who are building hardware to make it easy to essentially run your own cloud.) Nobody wants to deal with the nasty parts of running servers but if a company can take some of that complexity away, you could save a tonne of money over AWS.
Traditional bare metal involved complicated packaging and release processes. You would literally have a diagram of "these are the physical servers running this service (LB, web server, etc.)" and be able to point to them. You could overprovision workloads to tolerate failure but not just shuffle a service from one machine to another.
When I used to work in a similar environment we would develop code, then we would give it to a QA team. They would test it and give it to an Ops team. The Ops team would schedule a maintenance window and roll out the new code on each server. This happened maybe once a quarter because testing and releasing was a week-long process.
Racking new servers and provisioning them also required some manual labour. We had a process to use PXE to provision the machines but it was still toil. Virtualization was a big benefit because you could at least create and blow away VMs without having to re-image a whole server from scratch.
"Running your own cloud" implies that developers can treat instances like cattle and interact via an API. But it also means there's a standard set of tooling for fleet management. None of this stuff is entirely new but in small or mid-sized orgs it was out of reach 10 years ago.
traditional bare metal: Email IT and ask for 3 severs spun up for this small in-house project my team is working on. Email back and forth for a few days, book two meetings, and then wait 10-14 days before getting access to the servers.
Cloud: log onto a web portal, select the specs I want for the servers, press OK and log in 30 seconds later.
Then wait a week for tech support in India to respond because the public load balancer was provisioned with a malformed cert and there is no way to sensibly reconfigure it.
For one, you can use your compute resources much more elasticly. You can create and delete VMs on demand and don't need to drive to the colo to reimage.
I don't think one of you has to be wrong for another one to be right. Should Spotify have focused on its core competency early in its life? Sure. But at some point in the long years since, Spotify should have 100% looked at their cloud bills and built a way out of that lock-in.
I think that's a good take, it's easy to look in hindsight and say that they made wrong choices but we wouldn't even be having the conversation had they not been at least somewhat successful.
The question becomes then: 9,500 employee's and none among them know how (or wanted) to regain enough costs to save 17% of the company from losing their job just before Christmas?
Certain features (spotify wrapped for example) would definitely be a lot harder with more traditional hosting. But the bulk of Spotify's workload are not significantly hampered by moving slower on infrastructure and recuperating significant costs.
It's just very easy to keep piling infra costs on top of infra costs and not thinking about it, especially if it feels disconnected from company financials for most developers and they do not see a line between spending and jobs.
Spotify was, in theory, a growing product oriented company which means everyone is focused on growing revenue. To focus on cost savings means enough to make up for the GCP bills means you focus less on revenue and that means less growth. Saving money and losing 20% of your stock valuation due to slower growth is not a good trade off for those running such companies. That's not to say you can't have slow long term cost oriented initiatives but drastic efforts at the last minute (what you'd need to save those 17% of jobs this year) aren't that.
No, Spotify's success happened back when they mostly ran on their own metal. Going for the cloud happened at the same time their innovation started to stall.
>"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'm not sure what you mean by this as Spotify was actually quite late buying into cloud. They ran on bare metal through at least 2015. From their engineering blog:
">Thus, in early 2015 we started exploring what a cloud strategy would look like for Spotify."[1]
So they would have been running on bare metal through some of the biggest spikes in growth i.e launching in the US market. I don't think they bought in any more or any less than anyone else who transitioned from bare metal to cloud and for probably the same reasons.
> I've seen their cloud bill and it's significantly higher than 1,600 peoples jobs
An apples-to-apples comparison requires looking at all associated costs of switching to on prem (salaries, hardware, etc...).
I've only been a part of this analysis at a company dealing with a cloud bill in the low tens of millions, nowhere near the scale of Spotify (and I'm still relatively new to all of this).
> And cloud has a lot more lock-in than most employees.
It's a shame there are not better abstractions to facilitate moving to and fro.
Kubernetes is a pretty decent abstraction no? If all your apps and databases are containerized you can deploy in azure or aws just as well. And many cloud DBs support open source interfaces like Cassandra or JMS or Kafka etc.
how did you see this. How do you know what all the discounts and backdoor deals that were applied to the bill. How do you know the final amount that was paid out.
i am skeptical that some rando is privy to this information.
This is a wild leap of twisted logic. You posit that they might not have to lay off employees if they instead.... Paid a team to manage their infrastructure instead of outsourcing that responsibility to the cloud.
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.
"..Spotify had taken advantage of cheap borrowing during 2020 and 2021, when central bankers cut interest rates sharply in response to coronavirus pandemic lockdowns"
> “Embracing this leaner structure will also allow us to invest our profits more strategically back into the business,”
> invest our profits more strategically back into the business
why didn't they do this in 2020 when they got zero interest loans and free money from the government?
profits are for "strategic" investment but loans are for un-strategic and unsustainable hiring? got it.
I don't understand the question? They were able to use money more freely as it was more abundant, so they were able to take more risks. Now that money is more expensive, they need to be more careful about it.
I think parent might be overemphasizing strategic in that quote.
>> This is not a step back; it’s a strategic reorientation. We’re still committed to investing and making bold bets, but now, with a more focused approach, ensuring Spotify’s continued profitability and ability to innovate.
"Strategic" could be replaced with "efficient". They were previously optimized for growth -- now, they're optimizing for growth:krona.
Also, it is refreshing to see a head cut announcement that doesn't bury the lede: we're firing people, and this sucks.
Was lessso taking issue with burying, and moreso with the recent spate of bullshit "This is good for everyone" or "The world suddenly changed" or "This was always the plan" posturing in announcements.
"We optimized for one thing. Things changed. No we're optimizing for a different thing."
> "They were able to use money more freely as it was more abundant, so they were able to take more risks. Now that money is more expensive, they need to be more careful about it."
> able to take more risks
so who pays for consequences of the "risks"?
my whole point was to illustrate the idea of privatizing profit and socializing losses.
This isn't about rising costs though, this is about the labels and shareholders being greedy and wanting an even bigger piece of the cake that is already massive.
Meanwhile artists are getting paid next to nothing and now even workers are getting the short end of the stick.
I see this response a lot on these threads. Why is it so hard to accept that two digit inflation over the past couple of years and interest rates well above 5% could be a major factor?
Well how about thinking stakeholders first and shareholders second?
Firing your employees because you are incompetent leadership and management without good foresight should result in letting you go.
Why the high compensation for leadership when it doesn‘t know what it does?
Braun didn‘t get the design leader in the past because they threw out their team, they got there because they kept the team together. The more you learn the better for the company.
This goes for all tech related job cutting in the last months.
I‘m no business major, I have no clue how to handle a company on a stock market. But the results I see is that leadership took steps that let into people loosing their jobs. Why are shareholders and management so important and employees at the branches are not? Everyone in that chain should be taken into account.
Shareholders have had a poor investment so they do share in the failure. But the way a business works is shareholders vote for a board and the board installs management. This management then installs leaders/managers to oversee the different components of the business.
These people are the business and are often compensated in large part with meaningful equity. Everyone else (middle managers and contributors) are not the business - they just work for it. They are mainly compensated with a salary and are called employees. They are hired to complete tasks for the managers.
The managers will increase and decrease the number of employees based on the CEOs and other managers plan which the board approves. Plans often have certain assumptions that everyone (managers, not employees) agrees on and sometimes it doesn’t pan out so they have to change the plan.
Sometimes the managers resign or are fired when the plan fails and it was their fault. Other times they aren’t because it wasn’t something they could avoid (economic downturn, rise in rates, inflation, etc) or other reasons (they could be large shareholders themselves).
Just a nitpick, but this isn't the traditional definition of "riskless", which would be Treasuries. I believe the S&P 500 experiences an average drawdown of 14% in any given year, so it's hardly without risk.
You could more accurately say that SPOT has been underperforming "the market", "equities", or "beta".
I can’t find any references for when the 3 major labels held significant stakes in Spotify. Only Sony did with 5.7% at the time they went public, according to the principal shareholders section:
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.
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 businesses. It appears unlikely they will get another job soon. The situation leads to health problems and has ramifications for people. Fucking management can do whatever they want. They still get highly compensated.
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.
There are large forces that affect our lives that are beyond our control which cause us anxiety. We can deal with this in different ways; religion, government, or employers are all authorities who we may believe can help us through times of need (our healthcare, for some of us our literal ability to continue living, is tied up in our employment, at least in the US). It’s only natural that we run into problems when our bulwark against the uncertainties of the world is taken away. And then tie up the prestige of working for FAANG and the identity that comes with it, to learn that perhaps you weren’t so special; you were just caught up in a ZIRP phenomenon - it can be hard for an individual to take.
I don't disagree, but we all need to strive to do better. Pleading with perceived corporate overloads to fix problems they are simply victims of themselves isn't helping anything. I'm seeing this trend more and more where people want to blame ceos like they have some magical wand to fix the worlds problems. That's not how things work.
If we want to look for solutions, we should look at the 20 years of stimulus which go us here and question why this was happening and what we should have been doing about it. But, alas, few were complaining when they were able to get 500k loans with sub 3 interest rates...
How do things work? From what I can tell (speaking as an American), we do seem to have imbued corporate leaders with a reverence classically reserved for religious leaders. And who else are we supposed to look to? God is dead, and 40-odd years of starve the beast has left the government with seemingly few policy tools to enact change; though as you note they can still change interest rates and print money.
Hopefully someone will come along and save us, but it's hard to imagine who.
The government printed the money. They are the issue. Corporations compete with each other for survival, they cannot afford to be altruistic and expecting them to be is totally naive
Given that they are responsible for providing (and I suppose delivering as well) the healthcare of a majority of Americans, it seems problematic that corporations are nihilistic profit-maximizing machines though, doesn't it? I mean, I'm pretty sure we're all just boned at this point, but obviously I'm not much of an optimist. Judging by the declines in birthrates though, it seems like that's more or less what others are coming to conclude.
> This isn't about rising costs though, this is about the labels and shareholders being greedy and wanting an even bigger piece of the cake that is already massive.
Source? Because losing money every year does not seem sustainable.
That isn't what the inflation number means. An inflation rate of 0% means prices stop going up and stay at their current level, not that prices go down. Prices going down would be deflation, and that almost certainly won't happen.
I wonder how much of this is led by the likes of paying $200 million to sign up Joe Rogan or $25 million for Harry and Megan. That's a big chunk of change. 9,000 employees too - 17% of the workforce out the door.
Spotify made a gamble that having some headline Podcasters would build the listener market. Podcasters release regularly and have a different potential for becoming viral compared to musicians so it's a valid commercial decision to make.
Seems like their headline gambles didn't work but googling suggests that the podcast listener market increased 10% in the last year so I think they'll probably try again.
Podcasting has also been called the slowest growing new medium in the history of new media. I can't imagine it's earning its keep, relative to those big initial payouts. Meanwhile, the shows that are brought into subscription-only world systematically fail to attract new listeners; it is hard to use podcast exclusives to grow market share. Especially the talking head variety, which exist in abundance outside the pay wall.
Apple and Google have 20% and 16% respectively. Considering the amazing platform boost that those two giants have I think 25% is very impressive.
But I agree that podcastings growth has been very slow. I think that there are a
lot of factors influencing that. The biggest in my opinion is that listening to a podcast is more intimate than any other media (including broadcast radio) and that factor both slows uptake and decreases churn. Not a marketer though so just making that up.
I both agree and disagree with you here. The expectation of the podcasting business to be full of great opportunities and monetary gain was (probably) misguided, but 25% market share in an established market in just a couple of years when there were big players holding a majority share is still a huge feat.
Will it pay off? Probably not. But is 25% a big share? Yes.
Apple Music (Jun 2015) and Google Play Music (Nov 2011) launched after Spotify (Jul 2011 in the US). I think the 4 year delay by Apple is what allowed Spotify to become so popular in the first place.
The problem for Spotify is that they need a far bigger share of the market to be able to have negotiating power against the 3 record labels that they have to buy the music from. Apple/Alphabet/Amazon do not care as much because re-selling the music at cost or even as a loss leader is not a big deal to them.
Anecdotally, most of the podcasts I listen to advertise as being on Spotify, especially the ones that skew towards a more mainstream audience. I think Spotify's podcast play has largely worked to gain the mindshare, it's really just them and Apple Podcasts.
I suspect this means that Spotify subscribers are listening to plenty of podcasts, but perhaps podcasts failed to bring new listeners into Spotify.
Spotify itself is not sustainable and going for the podcast crowed...
I still think it was not a smart move...
Its like that blue haired streamer going from twitch to what ever the msft clone of it was.
Yes Spotify is super popular but I hear more and more people moving away from it to for example apple music or other services.
They don't focus on the core anymore that much.
For example they are super late on the lossless audio train.
Yes you can hear a difference from spotify and apple music.
I tested it with all my colleagues in the office. You can clearly hear that apple music or tidal sounds better then the spotify versions.
I played the same song from random services. They did not see the service nor the laptop. YouTube/Spotify/Apple/Tidal (We did not had access to more). YT usually was the worse followed by Spotify and then depending on the Genre either Tidal or apple won. All of them were in the highest settings.
The xm4 use Bluetooth and thus compress audio during transmission. Everyone of your listeners thus listened to lossy audio.
Fwiw there is not a single scientific listening test ever where participants were able to tell the difference between high bitrate mp3 and wav. Not even in perfect studio conditions.
Just curious, I have no stake in this, but did you have the "high quality audio" settings turned on for Spotify? I know they've had them in the past, I don't know what the specific name is for it these days.
At least with my AirPods or my fancy Master&Dynamic over-ear headphones, there is a pretty big difference in Apple Music vs others, but I don’t think it's necessarily about bitrate. I think Apple just gets higher quality masters of some songs. Same thing as Tidal when I used that, but Apple seems even a step further at this point (which is unfortunate because I really don’t want to rely on a mega-corp for everything).
Especially the ones with the Dolby Atmos (Spatial Audio) mixes. Even if you don’t have super high-res headphones, the difference in dynamic range is pretty obvious, and it makes songs just feel more alive.
I don’t have any stats to back this up but it seems that Apple Music has at least managed to somewhat buck the trend of the “loudness wars” with the masters they use. I wonder if this is actually published or written about anywhere…
You won't get a representative answer here because tech folk can be specific about what and how they listen, so our answers will make it appear like a big deal.
I will venture that most people don't notice or care.
I have AirPods pro and the sony xm4. Even on bluetooth you can hear the difference. The sound stage is just bigger. The highs are more clear and the bass is more subtle.
I was once remaking some hiphop beats from there samples and you can hear the difference even more when you have a remade beat (its not 100% the same) you can hear what the compression has done to the sample.
Probably didn’t help that the app was so bad for months after Joe switched over that Joe was saying “sorry the app is so bad, they tell me they are working on it”.
How much audience did they fail to convert? How much harder did that make building momentum?
To put it into context 9000 workers on an average of $75000 is $675 mil a year on salaries alone, so Joe's 200 over 3 and a half years, harry and meg etc etc isn't a big a deal as it might sound. The elephant is the 9000 staff IMO.
I wish CEOs would resign when layoffs happen. It should be like some governments where the whole cabinet resigns. If layoffs are a necessity, then the CEO and the top management should show the example and take responsibility for taking the company into the wrong direction, leading to layoffs. That would be fair and more understable than a "thank you for your hard work and commitment".
Business decisions are difficult. If the result of everyone that didn't pan out was "you are fired", no one would take any risk, decisions would take forever.
It's so hard to fire people in France, that some large companies simply have a policy of "no france office".
That's like demanding that anytime a F1 driver takes a pit stop he should be fired. Obviously the pit stop itself doesn't improve the time, and he's just sitting still. Imagine if a driver was sitting still after the race started!?
Layoffs are not desirable for a company, but sometimes they are required. The fact that a CEO decides to go with layoffs when it's the right thing to do shouldn't be seen as a failure of the CEO. It's the pit stop that keeps the company from exploding if you just ignore all financial health markers and keep everyone employed until the money runs dry and you have to gut the business and sell of part to cover the bankruptcy.
Lay-offs aren't necessarily a sign of failure or bad strategy, so your logic does not compute.
Lay-offs happen for all sorts of reasons. It may be very reasonable to have X number of people one year, but changed market conditions, or financing rates, or whatever else mean it no longer does the next year.
People don't have magic crystal balls. But even if they did, it may still make sense to hire people while financing such a thing is cheap, and to lay those same people off when it isn't any more. Make hay while the sun shines, and all that.
You may not like the fact, but getting rid of poor performers makes businesses stronger and better. Rounds of lay-offs undeniably make such decisions easier to make and justify in large companies.
CEOs who do the same (or more) with fewer resources are generally rewarded. As a shareholder in the company you'd want them to do more with less and make you more value, right?
You might as well argue that any CEO who needs to hire more people has failed. That sounds obviously silly, but it's genuinely an almost equivalent argument.
All of this may not be pleasant for those involved and especially those who are losing their jobs, but that's capitalism for you. Big business doesn't tend to optimise for people's feelings - it cares more about the bottom line and being competitive.
In this case there is an obvious and pressing need. The streaming music scene may be a tremendously complex place to operate a business in, with all it's licensing and labels and countless jurisdictions and legal complexities, but both Apple and Google are sitting there ready to eat Spotify's lunch if they can't figure out profitability.
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.
All of these hp tech start-ups/scale-ups overhired when money was cheap to signal growth and confidence to investors, even if they didn't need that many workers, nobody cared, as long as "line goes up".
This is nonsense. They hired people to grow users, usage revenue, not to brag about employee counts. Companies brag about maximizes revenue per employee.
I grew up with someone who is now in the C-Suite of one of America's largest corporations - a company that has been in the Fortune 100 for decades. He has bounced from directorship to C-Suite in Fortune 500s for the past 12 years, and I asked him about this phenomenon over cigars about six months ago, he said this:
"cbozeman, you have to understand these people. Most of these people making these decisions are raging narcissists. What do you think sounds better?
'I managed and led 500 people.'
'I managed and led 5000 people.'
And when you compound that on top of essentially free money, and then you also throw in the desire to lock up the best talent so your competitor can't have them, you have a recipe for indiscriminate hiring."
This person has been working in a high-level capacity in the corporate world for over 15 years now. He has seen some truly reprehensible shit, and shared quite a bit of it with me when we meet up once a year for ice fishing. I can tell you right now, not only is not "nonsense", it's perfectly logical - just not to you, and not to a lot of other HN users, because entirely too many people think in the logic of 1s and 0s, and not in the logic of people. High-level business decision makers - the kind who make these decisions - don't think like you. They don't value what you value. They see engineers and programmers as expendable and easily replaceable - and many of them are. For every 10x or 100x engineer / programmer, there's 500,000 no-namers who can be slotted in and out without much trouble.
I was talking about pay not perks. How much do FAANG/big-tech workers earn vs everyone else in the industry.
And maybe let's not victimize big-tech workers so much. Yeah, you have 17% chance of being laid off, but while you worked there you managed to save way more than people who work elsewhere.
And everyone gets treated as cattle. But big tech workers get treated like those premium beef freerange cattle that get massages and fetch 200 dollars per kilo VS everyone else that gets treated like a slaughterhouse cattle.
Well, this is another version of the classic "I could build this in an weekend" trope.
9500 is probably excessive, but think of it just this way:
1. Spotify has a worldwide presence, apparently 184 markets; that probably entails a legal presence in many of those jurisdictions, sales, marketing, support, localization, etc.; at a conservative 2 persons per market, just that's going to generate about 400 jobs; now, most of those markets will be grouped up but the big ones will probably have tens if not hundreds of people dedicated to that market (the US is likely to have hundreds of people supporting it, for example).
2. Spotify has to build, update, maintain, extend, etc a global infrastructure. Just the ops team for that has to cover 3x 8h shifts to make it 24/7. Each region should have at least 3 people in it, for high support availability. That's 9 people right there, and it would be crazy to support ~550 million active users with 9 people, they probably have 10 times that many people and teams supporting various components. So just an ops team of 100 is perfectly reasonable.
3. Then they need a dev team. They have... ads, various integrations, songs, audiobooks, podcasts, their apps or whatever are available on smart TVs, web, cars, bla bla bla, if it's 10 people for each client, that would probably mean at least 50 people. And 10 people per client is probably silly low, make that at least 100-200.
4. Then they have a bunch of backend services, probably a lot of them. Plop another 5-10 people for each service. That's going to be many more hundreds of people.
5. Then they have actual R&D, where they're exploring stuff. This depends on the company, but for a company that's still clarifying its business model, having 100 people researching stuff sounds reasonable.
That's ~1500 people just from me eyeballing their business. 9500 is maybe on the high side, but considering their scale, if we dig deep enough into their business model, probably 5000 is perfectly fine.
These services are crazy complex and "streaming mp3s" is a very reductive view.
That, and people often forget that - even if we stay on the engineering side of things - Spotify has tools and apps for artists, creators, and advertisers that most users never see.
I certainly couldn't build that in a weekend but nor would I need 9500 people. Keep in mind WhatsApp was running with 50 engineers in 2015 when it had 900 million users. Last year, according to some sources, it had 3000 employees and 2.4 billion users. And that's groups, voice messages, video and voice calls, WhatsApp for business, integrations and a lot more.
Some of these seem reasonable, some not. There is no need for legal presence everywhere or to even have a permanent hire for that. The many clients make sense (including consoles too) but more than 10 people per client? It's not the most complicated app. R&D I guess makes sense too.
Actually, it would be interesting to see the breakdown of employees by category.
Regardless, I think the answer lies somewhere between what you said (unknown at a glance costs) and what others have said - too many managers managing managers and overhiring.
Whatsapp is just sending messages. Here's music recommendation lecture on using latest techniques to better serve users. I am glad that their music recommendations are very good. There are so many nooks and corners in a big company like Spotify where you need someone to be responsible for.
While I think you're low on the legal/sales/marketing and so on, your estimates does trigger the question: How much easier/cheaper and profitable would it be to run Spotify as a purely stream music platform.
Lose the ads, audiobooks, podcasts, drop any platform that isn't iOS, Android or web. Would that be profitable, or would people not want to buy the service?
Spotify does awesome music recommendation - there are no human curation involved like with Apple Music afaik - you probably need a whole bunch of people for this.
They do much more than merely streaming mp3's and they working on a video product as well - there is some content creation as well i.e agents , sales , marketing and producers.
You can probably can compare them to Netflix (12,800).
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.
Apple made $5B in ad revenue in 2022, which was double their ad revenue from the year before. Apple is already being devoured from within by ads. If you think Apple will never stoop to putting ads in the OS like Microsoft does, ask yourself: where are Apple users going to go to escape ads? Linux? No, they'll just deal with it and keep buying Macs and iPhones. Apple is not your friend, they are a company designed to make money at all costs, and they're not going to leave ad revenue on the table.
They did, repeatedly. They are the only one company offering deep e2e solutions that are absolutely incompatible with the data profiling needed to scale ads operations to Facebook or Google levels.
Also, where did you derive your figure from? Apple breaks down services, they don’t say how much they make with ads.
Even If that estimate was correct, Apple’s ad operation would still be a blip in comparison to the other players.
Apple is of course a corporation with one goal, making money. I trust the people of that corporation to be smart enough to know how to balance that and the ways it can be achieved. Bringing ads everywhere is not conducive to that, and it would probably make them less money in the long term. That means: it won’t happen.
I only have one request: know what you’re talking about before you talk about a company.
Agreed, they're spending a lot of effort to be better at pushing "recommendations": the DJ, "smart" shuffle, the new home screen UI that prioritizes recommended new releases, concerts, and merchandise.
Those are all ad slots. They want artists to pay to be included in those in the future.
I doubt even half their staff is product development. Acquiring and licensing content is very complicated. Marketing, advertising and operations. Their entire podcast stack includes not only end-user experience, they own multiple podcast production and analytics tools (via acquisition of Megaphone, Anchor, Chartable) not to mention their in-house production via stuff like Gimlet.
I could understand so many employees for seemingly simple-ish tech services like this if 9000 of them are working in the customer support / tech support department. Wishful thinking though I guess.
I'm wondering what it is that they're doing all day. The spotify app randomly changes, and if so, rarely for the better. I'd wager spotify could benefit from X' style layoffs.
The X layoffs are too soon to make a judgement call on, look at the advertiser fight X is involved in now. Its up in the air if they kept enough people to make advertisers happy or moderation. Moderation has become a real problem on X, Ive sent reports that were clearly a problematic account, sometimes even fake accounts that are stealing identities, and the X UI sends me a message saying "nah all good"
The advertiser fight is primarily caused by Musk's inane comments, not layoffs or the lack of moderation. They do contribute, but to a way lesser degree.
So he didnt layoff part of the advertising team? It seems to me to be directly related to moderation, since its the usual "we dont want our ad to be near X" X being something advertisers steer clear of.
>Severance pay: We will start with a baseline for all employees, with the average employee receiving approximately five months of severance. This will be calculated based on local notice period requirements and employee tenure.
Is this a super vague way of saying we're letting go of the senior people with tenure first. The average severance being five months implies that most people being let go probably aren't the people hired during 2020 and 21.
On a separate note, we can add bandmates to the insane titles that a company uses for their employees.
> Is this a super vague way of saying we're letting go of the senior people with tenure first. The average severance being five months implies that most people being let go probably aren't the people hired during 2020 and 21.
No, they're saying that severance is based on tenure (and local notice period requirements). On average, people laid off get 5 months worth of severance - some more, some less, based on tenure.
I think they may have misunderstood the meaning of the word tenure (note "with tenure") and not realised it meant only duration of employment here (versus its use in US academia).
There's also some weight in the word senior as that can also be referring to someone who's moved up within paybands within the same jobtitle as well as the (now less certain) expectation that someone who continues to work at the same place will get promotions to more senior positions as they show they're capable of them.
Labour laws will apply, they probably can't just pick who they lay off. Maybe they have to let go the same proportion of people at all levels of seniority.
Yeah, where I live (NL), it's required to be something like "group people into roles, then let people go in reverse order of seniority (i.e. LIFO) within those roles."
It's slightly more complicated in NL than just last in first out, for larger amounts like Spotify is doing here. Apart from grouping by role, there is also a requirement to ensure the distribution of workers across age groups remains as similar as possible after the reduction compared to before.
Age groups in this case are 10-year buckets, 15-25, 25-35 etc. So if a role has for example 40% of the workers in 25-35, 20% in 35-45, 20% in 45-55 and 20% in 55+ then after the reduction it still has to be as close as possible to that distribution. So it's not like all of the younger workers that are "last in" in their early 20s would be fired, it would be similar numbers across each age group, within each group it's the last hired.
Some countries have longer notice periods. If you would work for Spotify in Switzerland, after 2 years you have 2 months notice. Given the period must starts with a new month (by law), your notice would start on 1st January. Adter 10 years its 3 months, where 5 months severance pay (as i understand it) would "only" cover at least 2 additional months.
as always, this means US people are cut immediately while acting like a progressive employer but not sharing any of the values of their European homeland when they dont have to
In addition to the technical work of keeping the servers running and the infra reliable, there is probably a great deal of work getting content licensing deals, working on marketing, managing the whole edifice, and stuff like that. They need a huge number of content “suppliers” to get basically every song in every country. They undoubtedly have a large number of developers working on apps for every platform, keeping up with all that attendant complexity.
On top of that, the company wants to innovate and probably has teams working on hardware and whatnot.
Whether it’s efficient is not clear, but most people there probably work hard on their particular daily grind.
Maybe. But for perspective it’s approximately 1/40th of the number of people that were employed at the peak of the Apollo moon landing missions (400,000 people) and that required the support of over 20,000 firms and universities.
Last I checked Apollo didn't have to deal with worldwide music licensing or have an audience of 500 million people across the world it needs to serve.
This comparison is fundamentally dumb. What's next, asking why you need hundreds of thousands of employees to run worldwide store business and comparing it to Voyager program?
Well the evidence sure seems strong they could have done the same job with at least 13% fewer people. I wonder how many of the remaining are also absolutely essential for the service to operate and grow?
Music licensing, streaming and revenue sharing is hardly a “go to the moon in the 60s” complexity problem. And having a lot of end users doesn’t mean you need massive employee head counts in digital service delivery, it just means you have a lot of customers and need to build your digital delivery systems to handle a larger scale which is generally expressed as a modest pressure on engineering groups to build most scalable systems and not a rocket science level problem.
The high head counts are always present at the end of boom cycles, but a LOT of what companies are doing at the end of these cycles is simply busywork.
The busywork problem exists because managers equate business with productivity, and their organizations reflect that.
The perception is not just that a busy worker is engaged and making an effort, but even that their industriousness gives them a higher value than their less busy colleagues. But really only a relatively small number of employees do the vast majority of the work (Pareto principle). The whole corporate management theory sets up a dynamic in which two office workers completing identical tasks can be judged on their busyness, rather than their results. Who appears to be more engaged: the busy worker who skips lunch to get things finished, or the efficient worker who finishes early and uses the time saved to buy groceries online?
This, when applied at scale, leads to highly staffed organizations with a LOT of busy people who don’t really do that much compared to their potential for output.
If you don’t see the metaphor between a large engineering project and an engineering organization that seems over staffed, that’s fine. But do try to have the social grace to not call people dumb. There is just no call for insults here.
Why are you mixing up complexity of work with volume of work (and comparing incomparable industries at that)?
Spotify's work might not be getting people alive to the Moon with 1960s tech, but there is A LOT of it since they need to cover so much more.
Rest of your post is pretty much bloviating with assumptions you have no grounds for - not to mention your almost insulting minimization of work that's not TrueEngineeringWorkForMoon(tm).
I've worked in streaming industry and I can tell you that there is a stupid amount of work getting all the licenses and content in order across all the nations that Spotify is present it. You can call it "busywork", but it's no more busywork than jockeying JavaScript to make your CI happy. It's critical for company operations - Spotify lives and dies on amount of content they have, the speed they get new content and the ability to payout artists across the world for their content. Not to mention take money from people across the world.
It's outright hillarious how everyone here underestimates a problem like "we need to legally pay out money in Germany to Rammstein for a song", it's like watching HBO's Sillicon Valley in real life.
There’s nothing incorrect about pointing out that the modern workplace reinforces busywork over meaningful engineering and managerial headcount justification. The data supports it.
Implying that “Jockeying JavaScript” isn’t real enough engineering work is also a look.
Arguing that engineering projects of scale can’t be compared because one can’t tell the difference between volume and complexity is rough conversation.
The idea that engineering on large technical projects can’t be compared across industries or eras isn’t true in an objective sense either.
Not super happy I took the time to reply to you and got told I was to get called blovating. That’s unkind.
That while stating that “everyone on HN underestimates things” and doesn’t understand how hard problems like paying someone for streaming actually is exactly the kind of nonsensical thinking that is building these large headcount companies.
Your argument is that “global payments are harder than people realize.”
But it’s simply not true. They are profoundly easier than they have ever been in history and people on hacker news are many of the very people creating those payment rails.
So I think calling their opinions “hilarious” while insulting the entire community and the person you’re talking to… it’s not… great. Calling it a “real life” Silicon Valley kinda is though, because well, it kind of literally is. This is the website of the most successful Silicon Valley incubator.
I come on here to learn and have positive interactions with people, grow intellectually and this isn’t quite what I am looking for. Thanks for your interaction though. Have a great day.
Apollo wasn't travelling all over 100+ countries scooping up podcasts and speaking to growing artists though. Your comparison is weird, the goals are quite different.
When I was junior I used to buy this explanation, but 9,000 developers is probably more then are actually working on huge projects like Linux or .NET it’s approx 100 times more developers then you’d ever reasonably hire. It’s just for financial reasons it’s cheap to double up of devs instead of giving raises
Because I have experience in the industry. Where is anyone getting any of this info? Don’t just believe these guys they are fake accounts repeating marketing info.
I also have some 2 decades of experience in the industry, so please, share me your reasoning, how did you arrive at these numbers? Just a ballpark, no appeal to authority as I believe we are both similarly seasoned...
> They undoubtedly have a large number of developers working on apps for every platform
Yes, if they were at the cutting edge on every platform and constantly adding innovative new features, that could certainly explain 500 of the 9000 employees.
But that still leaves 8,500 employees unexplained.
Developing the software is easy part. Handling and negotiating contracts and licensing agreements for all their music and podcasts (and advertisers) all across the globe is probably the hard part. Plus of course all the marketing, support and related tasks.
Still. There's only ~200 countries, and a good chunk of them either isn't worth having any presence in (no need to negotiate licenses for Somalia), or is so small and has similar laws to surrounding countries that they'll be treated as one bloc by the publishers you negotiate with anyway (all the Pacific statelets e.g.).
Between that and the ability to just contract local lawyers, 45 to (realistically closer to) 90 employees per (relevant) country is still a lot.
Also, spotify outsourced 90% of their support to their community (designated "star" members). There's no hotline either, so no call centres to run, or anything else personnel intensive. (And you'd outsource that anyway, realistically.)
This is the only valid question here. Bloated workforce is somehow a must-have byproduct of growing cash flow, someone could surely say why. Is it prestige? Is it managers gaining more power by commanding more teams and this workforce then remains? Is it to please shareholders with feature bloat? Is it an actual (one-time?) need to scale up globally?
I hate Xitter like the next guy, but if there is one thing Musk made right is to show you can axe most of the staff of an established platform and you can still have a running global scale operation (ignoring some early downtimes/hiccups and all other, khm, content-related issues). It seems currently they have around 600 full-time engineers.
> I hate Xitter like the next guy, but if there is one thing Musk made right is to show you can axe most of the staff of an established platform and you can still have a running global scale operation (ignoring some early downtimes/hiccups and all other, khm, content-related issues). It seems currently they have around 600 full-time engineers.
Xitter is massively tanking as a company with massive revenue losses since that brilliant idea. Its example proves literally the opposite of what you're claiming - after firings the company is in tailspin of financial losses.
How is the revenue loss a cause for downsizing? I mean bigger revenue loss since Twitter always made losses. If you say lack of moderation (workforce) and thus leaving advertisers, I think that's a minority, and moderators were just a fraction of the people let go.
These are probably not all devs/engineers. Usually, selling services/products in multiple countries mean, dedicated legal, HR, accounting replicated in nearly every location where no common treaty exists, and management in large tech tends to have too many levels and adds up quickly as well.
“probably”? I mean, yes it’s a tech company, but it’s a bit surprising anyone would expect it to be much more than 50% engineering. Marketing and customer support alone would have a huge headcount - and given the impact AI tech is having on those areas, I wouldn’t be surprised if they represented a disproportionate fraction of the layoffs.
exactly 0 engineers working on the stupid "enhanced shuffle" or whatever its called that I am forced to toggle through in order to switch between shuffle and non-shuffle, and makes me wait 5 seconds while adding random songs to my liked songs that I dont want and did not ask for. The amount of computing resources wasted on this trash is just insane, both on the backend for the song recommendations and on the frontend where my phone is frozen for 5 seconds. It escapes me how such a big company is fine with having that this abomination of a feature in their app. rant over
I mean, yeah. How many engineers do you need? 5-6 for the backend, 3-4 DevOps, maybe some more for the various frontends... say, 20?
I can't imagine the whole thing can't be done with between 30 to 50 engineers in total.
And everyone else, what do they do? Cold calls to the entire planet to go subscribe, or what? Also alright, some lawyers and "compliance" people, financiers, marketers,...
Don't know. I'd struggle to fill a roster of 200 people for Spotify.
> Clearly not working on the core functionality of the app - heh.
Sadly, yes. That they become so tone-deaf is something I'll never condone though I do understand why it's happening (or so I think: is it the gobs of money that make people comfortable and disconnected from the bread and butter of the company?)
Internal tools for licensing, library ingestion, tools to support data science, customer payments in however many countries they're in, artist payout, search, recommendations, encoding/playback (probably even multiple teams for multiple platforms), whatever their ad sales platform looks like, ad selection, concert listings, merch sales, wrapped (which is probably their most loved feature)
Some of these are a team per region, some are a team per platform, some are entire divisions
>I mean, yeah. How many engineers do you need? 5-6 for the backend, 3-4 DevOps, maybe some more for the various frontends... say, 20?
So Spotify should bring you in as the CTO, right? How can you make such a confident claim that you know better how to run the company that has beat the daylights out of every other music streaming platforms (including Google, Amazon, and Apple)?
Whelp, even for tech-core products, number of engineers are often very insignificant compared to other stuff(legal, license, buying, acquisition, hr, advertising, marketing, sales, security, management, decision board, product management, product owners, agile team, release team, test/QA, support etc.).
I used to think that, tech companies could do with like what 200 people max, but after working on few places for a while now, I am no longer surprised, specially when your service spans the globe(or even multiple countries or continents), you really need a huge team to keep troubles out and the wheels going.
According to LinkedIn, Spotify currently has 13,900 full-time employees, with 3620 in Engineering (26%), 1850 in Arts & Design (13%), 1000 in Media & Communications (7%), and roughly 800 each in Marketing, Business Development, and Sales (5-6% each).
Over the last 12 months, headcount has risen dramatically within Sales (+32%), Arts & Design (+19%), and Business Development (+21%). In comparison, Engineering has seen just a 2% rise, Media and Comms at 0%, and marketing at +10%.
If I had to guess, lots of these layoffs will begin to affect their headcounts within these functions that have experienced rapid year-on-year growth, and affect their Engineering function (despite being their largest) proportionally less than these other functions.
I would be interested in how you came to your conclusion of needing only 200 employees for a company of this scale? Any company of spotify's scale will have entire functions that will be distributed globally and working on a variety of projects or products. For example, Spotify has almost 400 data scientists. Off the top of my head, I can't fathom what I would have 400 data scientists working on, but I can easily believe that a company with over $12bn in revenue and 574 million listeners this year could find a use for them.
Lmao, I love this comment so much because of how incredibly uninformed it is. 5-6 backend engineers to run Spotify in 185 countries... I've seen a lot of ridiculous comments when it comes to company sizes, but yours is probably the best one I've seen in my life, thanks for the laugh.
Is it because you've never worked at a non-startup or how come you have that opinion? Like, you just have no idea what's required/useful and you can't even imagine it?
I'd love to hear how you split the workload between these 5 backenders.
Obviously I can't be well informed since I don't work in there, I am saying that the core functionality of moving bytes around the globe is not something you need hundreds of people for -- because I worked on similar teams. In fact the DevOps team was times bigger than the programmers which might be one clue in Spotify's case.
Have you ever worked at a company with more than say 1k employees that's active in more than one region? I'm honestly intrigued in your opinion, it sounds similar to what I thought back in uni before I had any work experience, but from your profile you don't look like a complete junior, so I'd really like to better understand how you can think Spotify could possibly operate with 5 backenders.
I am 43. :D And with 22 years of experience, 95% of which in backend and some sysadmin-ing.
Though I have only once worked in a huge corporation (and I couldn't understand what did they need all the people for either).
I was almost always working in smaller tight-knit teams that got a LOT of stuff done (too much contracting for my now 40+ y/o self).
So I err on the side of "be efficient" and that's not even for the purposes of cost efficiency. It's more about being able to iterate with a reasonable speed. My observations from my career support what Bill Gates and others said i.e. that the productivity of a tech team starts to decline when it goes beyond 7 people. Generalization, sure, but it's very often true.
As for the 5 backenders thing, OK, my perspective might have been too narrow i.e. "writing code to move bytes from our servers to CDNs to user's devices can't be that hard" and I mostly stand behind it. Sure you might need much more devs to author complex login systems, SSO and such (if you even need it) but again, after the product somewhat stabilizes, how much backenders do you really need?
I am also interested in your opinion. My entire career has been a proof that small and tight-knit teams get sh1t done and everyone else drowns in bureaucracy.
For larger companies, there's a lot of "hidden" functions that you're probably not aware of as a customer. Just payment integrations in 100+ countries, with all the local regulations and reporting requirements is probably going to be rough to handle with a single team of 5 backenders. Then we have functions like marketing content management (every country has different copy and will probably want to be able to surface things slightly differently to maximize conversion), artist/podcast/audiobook tooling, the ad platform, hardware integration (for Spotify in your car/speaker etc), legal stuff (including GDPR and its equivalents), metrics & data analysis tools. And much more, and those are just some of the things you don't really see as an end-user.
I absolutely, 100%, agree that a small and focused team is the best way to get shit done, but for a large company the size of Spotify the amount of work is absolutely massive. I wouldn't be surprised at all if many teams at Spotify are small and tight-knit and doing great work at delivering kick-ass anti-fraud systems or moderation software to detect and report child porn etc.
Not to mention the obvious thing where the higher your revenue, the less percentual impact each employee needs to have to more than pay for themselves. While you might think it's ridiculous to have a full team dedicated solely to the main marketing page, that could be extremely worth it if that team increases conversion by 10%, as an example.
But as another commenter pointed out -- it's actually 13900 people.
Again, everything you say it's true but I am finding it hard to imagine the scale and the degree of the problems that mandate ~14k people. Sure, 1000. Maybe 2500.
At the time WhatsApp was only forwarding messages from user to user. They didn't deal with different contracts and license deals in 180 countries. Nowadays they have a lot more country specific regulations to deal with, and also a much higher headcount.
I remember when rolling out Yandex.Music (a similar streaming service) in 2010 we had maybe a dozen developers rounding way up, a half dozen strong BizRel team, perhaps three DevOps and a few managers. Totalling around 30 people, though dozens more would do some things by the virtue of being integrated in much larger Yandex team.
Obviously we had way fewer regions/catalogue/listeners/platforms, especially back then.
Why would it be a satire? I've worked on much harder problems than moving anywhere between 1MB to 20MB files from a CDN to user's devices, and we were 11 people, responsible for dozens of terabytes per workday.
Obviously I am not well-versed in all the legal requirements and many other commercial aspects, but to me 9000 is quite insane and surely can be optimized away.
Don't you think there is big difference between moving files to some users' devices vs moving files to literally half a billion users with almost 100% uptime? Not considering problems associated with the scale of Spotify and instantly dismissing the task of managing that as something trivial (or at least easier than your work) makes you sound arrogant.
Because it's like a cliché example of an engineer with the view that some relatively successful real-world product—that they have no real insight into—is far easier to implement than the people who _are_ familiar with it have. You see this literally all the time, to the extent that it's become a meme, and it's hard to believe anybody would make that argument seriously.
Spotify might have too many engineers on-staff; reducing the service to "moving between 1MB to 20MB files from a CDN to user's devices" is a flatly uncurious approach to understanding what engineering challenges they might face or if that's really the case. It's a service that _adds_ 100k songs a day, for goodness sake.
I wouldn't be surprised if Spotify moves a petabyte of images a day, I can't even guess the amount of data from their songs and videos. But obviously just moving data isn't what requires a lot of employees.
Am I understanding correctly that you're looking for a HN poster to explain to you the complexities involved in maintaining compliance, legal and licensing for a globally distributed service, just so you can decide whether or not to be outraged by the size of Spotify's staff count?
Here’s just one example of where Spotify didn’t actually have enough staff to understand the legal requirements of one single product decision: https://news.ycombinator.com/item?id=24764371
Obviously you don't need all those people. Almost no company apart from like one-man companies or dying companies employ only the people they need. You employ as many people as possible that generate additional profit, short or long-term. Do you need to hire a conversion specialist? Of course not, though if she costs $400k a year while improving conversion by 10% the payoff is absolutely massive, and you'd have to be an idiot not to hire her.
I'm surprised people don't realize this, especially on hackernews.
> The severance package seems quite generous as well.
I guess it depends a bit what they mean by `the average employee receiving approximately five months of severance` (and also where you are seeing it from, maybe its seen as more generous when seen from the US). In Sweeden the notice period for the employer is between 1 and 6 months, depending on how long the empoyee has worked there. If they count that period in as part of the severance package, it could wery well be "the legal minimum" or "the legal minimum + 2 months", which sounds less great than 5 months :-p
If its "the legal minimum + approximately 5 months" then it's generous.
In the other developer-downscalings I know about here in Scandinavia (Norway if it matters) the most common deal has been 6 months, either "work for the remaining notice period, then 6 months pay" or "6 months pay, you work out the current month". I say "deal", because its a deal where the employee gets that pay, and then resigns voluntarily. If they don't take the deal they only receive the legal minimum, but they can then fight the firering, which can get expensive and complicated (I have never heard about anyone not taking the deal).
Yeah you're not entitled to anything in the States. There are no employment contracts and you can be fired for any reason without notice. The only reason to give severance is to avoid bad publicity. There isn't any mandate that the company has to offer anything.
There really should be though especially when the company in question was able to afford $1 billion in stock buybacks just 2 years ago, and when the CEO has a $3 billion net worth, and when they are well known for not paying their suppliers (the artists) a fair price for the content they create.
> There are no employment contracts and you can be fired for any reason without notice.
You can also leave the job at any time, which as a frequent HN user I'm sure you know and may have used it to your advantage.
> There really should be though especially when the company in question was able to afford $1 billion in stock buybacks just 2 years ago, and when the CEO has a $3 billion net worth
They were also in a hiring spree 2 years ago, like many tech companies. Many of the current employees wouldn't have a job otherwise.
The CEO is also the founder of the company, who built it over time from scratch. There have been many ups and downs during their 17 year history. 10,000 jobs didn't appear overnight. We hardly hear when company hire, only when they let people go.
> and when they are well known for not paying their suppliers (the artists) a fair price for the content they create.
Apparently they don't make big fat profit given this layoff
The employer/employee relationship is imbalanced. The ability to leave jobs instantly is not equivalently powerful as the ability to fire people instantly. A corporation that loses an employee suddenly is typically disrupted in a very minor way. A person that loses their job instantly might not make rent next month.
That may be true in aggregate, but for tech workers over the past 20 years the scales have been as heavily in their favor as any industry's employer/employee relationship potentially ever.
In the U.S. the WARN act does mandate 60 day notice for layoffs over a certain size. In practice, (at least with many of the recent tech layoffs) you get 60 days on-payroll during which you don’t have to do any work. Severance after that is optional but often still paid, again at least among tech companies. ~2 weeks per year of service is common, although some have offered more than that.
I got laid off in Jan 2023 and they only gave me the 2 weeks, but was able to at least negotiate that my end date fell on on Feb 1 so I could at least have healthcare until the end of the month.
for context in case you missed it, Spotify are headquatered in Sweden. Hence the GP's comment about it potentially being the legal minimum they are allowed to give.
"Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact. More people need to be focused on delivering for our key stakeholders – creators and consumers. "
While this is likely partly true, this is mostly management's fault. I didn't see anything in the email that talks post-mortem about the root cause and how it will be prevented going forward.
Absolutely feel bad for the people that are being let go in today's economy.
When it comes to Spotify in particular, I use it almost daily and I can't say that I've noticed any new features in the past two-three years, other than some semi-confusing reshuffle of where stuff is listed on the home page. Feels like it is an app that is well and truly in maintenance mode - it just does what it says on the tin, with extremely good market penetration.
So genuine non-facetious question as an outsider, what are the people working on? Does it take this many people to operate an app on the scale of Spotify, are there lots of people developing new features that never make it into prod, or is it something else that I haven't thought about?
For comparison the Jet Propulsion Laboratory has around 7000 employees, and they develop and operate multiple Mars rovers, several space telescopes, a whole range satellites and space probes, etc.
Spotify is a public for-profit company with shareholders, the purpose of their organization is not to make profit so they can redistribute it, but to increase the share value as much as possible in order for the shareholders to benefit. Sometimes that means that they need to increase profits, but not always, there are other ways to increase the share value besides profits.
"Hype" is a common way for "modern" companies to drive up share price, see TSLA for a good example of that. Greenwashing is another, not as common approach.
Companies can do whatever they want, it does not mean it will work. No company’s share price is going to up for years and years because of “hype”. And the hype is for future profits anyway.
The point is Tesla earns a lot of money, and has a good, proven trajectory.
Close enough for the purposes of this conversation. Point is, they earn more money than they spend, the gap between those is growing. And they did it in a high barrier to entry business.
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.
Spotify basically started as a P2P Grooveshark that promised to pay royalties. Now they are a CDN that pays royalties. The problem is that they refuse to accept the reality that there is an end to growth.
They have opportunities to leverage their massive footprint by vertically integrating. They could begin to acquire talent and exclusively release their music and prioritize it in their algorithms or forge agreements with existing labels that create this sort of arrangement. They would then have leverage to negotiate better deals with 3rd party rights holders.
In essence a type of payola since they have a lot of sway in picking winners and losers. They sort of tried this with podcasts but I’m not sure those move needles like music can.
So yeah their current model may be limited but they have a lot to work with.
They are certainly doing that. But that is only a solution to the select few who are chosen to be vertically integrated with!
They have also vertically integrated in the opposite direction: by making deals with large media corporations, and also by implementing DRM (to appease those media corporations).
So at this point, there isn't much vertical integration left to be had. Any more deals with individual artists (or labels) would really just be horizontal integration.
> So yeah their current model may be limited but they have a lot to work with.
That limit is practically the entire worldwide music industry. They are very close to that limit, and seem utterly ignorant about it.
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.
Page 1, the R&D, sales and marketing, and general and administrative expenses are probably almost all payroll expenses. And they are basically equal to or exceeding gross profit, which means payroll is a huge expense.
Why are you comparing it to their gross profit and not to the rest of their costs which is what I said?
Ultimately Spotify's staff costs are significant because they were throwing people at trying to make the podcasting business work, which was a failed bet but they need to do.
The main issue though is that buying licenses to music is just too expensive for the amount of money they charge, and they need to license less stuff or charge more money.
Because of the expenses Spotify can control, payroll is (seemingly) its biggest one. Spotify is never going to be able to reduce the proportion paid to the music owners.
They have 9500 employees. Just salaries alone at a very conservative (for american standards) 75000$ average make up 700 million dollars a year, excluding healthcare and other expenses. Payroll is definitely a huge cost.
I am a cynic here but part of me feels that with such low interest rates for so long, a lot of companies in tech could ignore profitability so long as they were hitting that MAU and related targets.
Counterpoint: almost no one I know uses it. It was fun at first but became boring fast, a bit like Netflix. If I want to listen to music I use youtube.
This is like the HN trope of “nobody uses Facebook / Instagram / [other social media product] anyway.”
These services are global with hundreds of millions of users or more. There’s nothing useful to be extrapolated from the usage patterns of yourself and a handful of friends.
(Personally I only listen to Amiga MODs and watch 8mm home movies of my mother while whistling the theme from “Psycho”.)
Counter-Counterpoint: I got two teens in (American public) high school - they claim "everyone" uses Spotify and grumble about our YouTube Music/Premium subscription. ¯\_(ツ)_/¯
Paerhaps in your circle of friends. But spotify is not that popular. I wouldn't be surprised if their numbers of users are doctored. I know travel sites count the number of devices used by the same user as distinct users. One reached a number higher than the actual world population, people starting asking questions, and then they clarified it. It helps with marketing when you create the impression that "everyone uses it". For instance Threads has more users than OpenAI's chat bots but people think there are more users of the latter due to marketing. Spotify claims to have 226 million subscribers - as many as there are yahoo users. Yet I guarantee you that Yahoo is not popular. And neither is Spotify.
The penetration rate is pretty obvious when you look at social media at this time of year. Everyone has posts of their Spotify Wrapped. 226 million doesn't seem that high when it's the only music streaming service that most people in Europe are even aware of.
Did someone check with _everyone_? It feels like when people make such statments they refer to their own bubble. "It is known" is not a valid argument.
I didn't watch either, but judging from the comments, it's the usual story: they are completely beholden to record companies, who own rights to nearly all of their catalog. Thus most of their revenue goes straight back out the door as royalties. Moreover, the recording companies can raise the rates pretty much at-will, which apparently they have done upon seeing Spotify starting to make a bit more money.
That is why Spotify are desperately trying to produce their own content, most notably in the podcast space, and I suspect why they also recently branched out into audiobooks, as every hour spent listening to an audiobook displaces a dozen or so royalty-generating song plays.
I'm surprised Spotify wouldn't take this to the next step and, borrowing a page from the old industrialists, try to vertically integrate and start their own music label and talent scouting arm.
You would think they could pull a "Netflix and House of Cards" to use all of their play data to find exactly which kind of niche singer/songwriter people would want to hear. They could then use their reach + algorithms to float their artists into people's "discover new" playlists.
> I'm surprised Spotify wouldn't take this to the next step and, borrowing a page from the old industrialists, try to vertically integrate and start their own music label and talent scouting arm.
Probably because music is spread quite far and the labels have a tight grip on the industry. If you want to have the music most people listen to, you need to have the top talent. Also, music is not as fungible as music is - if Spotify is lacking popular music, people are going to be discontent, use less playlists and use Spotify less in return.
> You would think they could pull a "Netflix and House of Cards" to use all of their play data to find exactly which kind of niche singer/songwriter people would want to hear.
I'm not sure this is working that well for Netflix. It has lot of pressure with competing streaming services that market their exclusives and their library is pretty lacking, compared to a few years ago.
House of Cards was a home run. It was the nudge that made me breakdown and sign up for Netflix streaming after they split it off from DVDs. But these days, Netflix is probably the service that is closest to me pulling the plug. It's relatively pricey and there isn't a lot that I really want to see on it.
Agreed. I mentioned this is another thread - they need to vertically integrate music. They have all the leverage as the distribution channel and controller of algorithms. To start they’d probably want to buy a label or pay money existing labels can’t afford for the people that can find and attract top talent.
In essence use their size to pay more than record labels and eventually acquire them.
They tried with podcasts. Several podcasters jumped on the chance to trade exposure for a nice big check. Don't know if it worked out for Spotify or not though.
And not make their music available on CD/digital download? Taylor Swift is not going to agree to make her music only available on Spotify. That would be insane. Some small act might. In which case no one would care.
They're trying to be an aggregator but the record companies know this and they're businesses, not consumers, so they just put up an old fashioned cartel against the aggregator.
Also why they are pushing so hard for getting people outside their playlist with "jams" "radio" and the automatically enabled "similar content" features, so they can fill play time with low royalty music.
The author of the video argues that Spotify will ultimately fail due to the high cost of membership, the fact that streaming services pay independent musicians less than traditional music platforms, and the company's neglect of its only asset - its artists.
00:00:00 The author of the video argues that Spotify will ultimately fail because of the high cost of membership and the fact that streaming services pay independent musicians less than traditional music platforms.
00:05:00 The author of the video makes the case that Spotify will eventually fail because of its business model, which relies on rapid growth and unsustainable levels of value in the music industry. He argues that if Spotify's independent musicians were paid more fairly, the platform would be unable to survive.
00:10:00 The author of the video argues that Spotify will eventually fail due to the company's neglect of its only asset - its artists. The author believes that this neglect will lead to the eventual collapse of the streaming music industry as a whole. However, he also believes that this collapse will be hastened by the fact that for-profit companies are required to eventually pay their investors as little as possible.
00:15:00 The author of this video argues that streaming services like Spotify will ultimately fail because they rely on artificial scarcity (i.e. the notion that there are not enough songs available to listen to on the platform). They suggest that instead of using streaming services, musicians should focus on releasing their music on their own platforms, such as Bandcamp or their own website.
"The video starts by talking about how Spotify has become the dominant force in the music industry. In 2018, Spotify had over 200 million users and was paying out over $5 billion in royalties to artists. However, the video also points out that Spotify is not a very profitable company. In fact, Spotify has lost money every year since it was founded in 2006.
So, how does Spotify make money? The answer is that Spotify makes money by selling advertising. In 2018, Spotify generated over $1.2 billion in advertising revenue. This means that Spotify is essentially a media company that just happens to also offer music streaming.
The video also discusses the impact of streaming on artists. On the one hand, streaming has made it easier for people to discover new music. This can be a good thing for artists, as it can help them to reach a wider audience. On the other hand, streaming has also led to a decline in album sales. This is because people are no longer willing to pay $10 or $20 for an album when they can stream it for free on Spotify.
As a result of this, many artists are now struggling to make a living from their music. In fact, a study by the Berklee College of Music found that the median income for a full-time musician in the United States is just $20,000 per year.
So, what does the future hold for the music industry? The video argues that the music industry is in a state of flux. It is unclear how artists will be able to make a living in the future, and it is also unclear how Spotify will be able to continue to grow its business."
Unfortunately, that's an example of where A.I. didn't do a good job of extracting the key thesis of Benn Jordan's argument. Arguably, Benn Jordan himself didn't make it easy for the automatic semantic algorithm to summarize his main point because he's not stating it clearly enough and sprinkles in tangents throughout the presentation.
Basically, he says "Spotify Will Fail" because they created a flawed and unsustainable economic structure which happened because it signed lopsided licensing deals with the Big 3 Labels that leaves no significant money for smaller artists trying to make a living. Spotify had to "overpay" for the Big Labels song catalog to attract a large userbase so its current financial history has been a roundabout funneling of VC investment money (and most subscribers' money) into the Big 3 Labels rather than create a sustainable streaming business where more musicians can share in the pie.
The random sentences extracted by Bard AI hide Benn's core thesis.
The other sentences not extracted are the ones that support Benn's main argument: (1) the lopsided Sony licensing deal example, (2) the various other examples of VC money spent on subsidizing fundamentally unprofitable businesses structures for participants (Uber, $9.99 unlimited movies at theaters, etc).
"Spotify is essentially a media company" - they are definitely still a music streaming company with an ad-sponsored product-tier, even if the ad-sponsored tier is the most popular or most profitable. Also, when you have an ad-sponsored tier you are not streaming for free - you are paying by selling your attention, it's just that the resulting cash price of the subscription is opaque to the user.
This differs from e.g. Google that runs a large ad platform used not only by several of their own services, but also external products and services (other websites and apps).
Has Spotify ever made money? It seems strange that all these music streaming services have limped along for years without having a model that makes any money or sense. Convenient for the rest of us I suppose.
They have an operating profit, but they choose to reinvest it all back into the company, thus they don't have an overall profit. They could reduce the amount they are reinvesting into the company at any time in order to produce an overall profit.
This is exactly what Amazon did/does. Doesn't mean that they have "limped along"
It's complicated. A lot of money exited from Spotify after its IPO. The rightsholders (Warner, UMG...) got an outsized return on that investment. Smooth it out since then and it looks like a more routine profit. I'm not sure if basic financials are an adequate format for a backcatalogue monetization business.
Indeed. Personally I think it's somewhat perverse how a huge machine operating at a loss can redistribute so much wealth though, to the top, no less. That was sort of my point.
Like, I could have an easier time accepting Spotify losing money if it actually enriched the masses that produce the majority of its content, but we all know that's not what it is doing.
>They need a bigger cut. 17% will not have a big enough impact to its bottom line.
What's stopping them from bigger cuts? We've seen that big SW products can run on lean teams(whatsapp, post-Musk Twitter) and we know many large tech companies are overloaded with way more workers than they need to run(Google), just because they could overhire when money was free.
>Apple and Amazon will eventually eat Spotify given enough time, if they don't find a moat to be built
What prevents Google from doing the same? They already have a large customer base in Android users.
For anything other than American and maybe European music, YouTube Music is so much better nowadays wrt availability. YouTube Music has stellar quality of recommendations too.
But Google could easily do a Google and sabotage the product at some point.
About a decade ago they had Google Music. A friend of mine really liked it. He was supposed to have a for-life price of $7/month (or something) and then they raised prices and failed to grandfather his price in. Being Google, there was no way for him to complain about this to them, so he cancelled and used a product he liked less, out of spite. At some point they launched a duplicative product, YouTube Music, which they later migrated all customers to.
>He was supposed to have a for-life price of $7/month
At this point, consumers should know that "for life price" is a scam to get gullible customers through the door and gain market share or collect user data. Just like with a Ponzi scheme, consumers should realize by now why such pricing is not sustainable long term due to inflation and other costs, and either the business will crash or they'll have to inevitably backtrack on that promise and raise prices to stay afloat. You can't have your cake and eat it too.
No excusing Google of this scam, but they only did what every other company with these kind of hollow promises did.
I vividly remember Cerberus on Android was selling one time licenses for life, only for them to backtrack on that years later and switch everyone to their subscription instead, publishing a letter along the lines of "sorry, we know it sucks, but the lifetime licenses we sold you are unsustainable financially for us, so we'll switch you to subscription UwU."
Spotify is actually trying to make money. If the goal of running Spotify was to get everyone to listen to the CEO's crappy garage band, maybe then it would be a valid comparison.
Unless they can somehow turn "use" into money, more use does nothing to help X as a company. And the prior method of turning use into money, advertisements, has been dropping like a rock due to the inability of the company to keep ads away from toxic content no advertiser would ever want their ads near.
Can't cut costs to profitability if you are cutting revenue faster than costs.
- Features have to keep being deprecated because once they degrade it's too hard to fix.
- Use is only up when measuring metrics like "we hit our peak user-seconds" which only measures short term usage spikes and not longer time-scale sustaining metrics.
- Lack of diversity of users, instability of ads performance, and a CEO making antisemitic and anti-Palestinian claims has led to advertisers pausing Twitter ads at a high rate. Valuation has dropped to $10s of Billions instead of $44B.
- Small bugs never get fixed (on Firefox mobile if I accidentally hit the "Views" button on a tweet, the pop-up modal is inescapable and breaks my back button and tab state, so I have to open Twitter in a new tab.
That is meaningless when the vast majority of users aren't paying and won't pay for the foreseeable future. Advertisers pay, and Elon is doing all he can to drive away advertisers. Ad quality on Twitter has severely degraded over the past two months and we all know why.
Before trialing the iTunes franken-nightmare that is Apple Music, I would have probably agreed with you.
However, after that experience, I'm starting to think there's no way in hell a massive multi-product conglomerate like Apple/Amazon is going to overtake a single-product music streamer like Spotify.
Apple/Amazon are clearly stretched too thin, and in a worse strategic position on audio due to the way the licensing agreements shook out. In music, everybody basically has access to the same catalog on every platform.
And given that songs are 4 minutes long (vs 4 hours binging TV shows), you spend wayyy more time interacting with the software in audio vs. video. So in audio, it's purely just deciding which UI/features you like best.
Spotify seems to be trying its best to screw up the UI, but no way it ever gets as bad as Apple Music given that's their only meal ticket.
> However, after that experience, I'm starting to think there's no way in hell a massive multi-product conglomerate like Apple/Amazon is going to overtake a single-product music streamer like Spotify.
Amazon Music Unlimited is very neat experience compared to Spotify... Good catalogue (for me), better music quality and it's app is just plain, boring music player not something neurotic like Spotify...
The one thing I could not figure out about Amazon music is that when I would type in an album, and start playing it, the songs would reshuffle based on which songs I would listen to the most. It drove me insane, and caused me to cancel the trial before it was even up. I couldn't figure out how to play an album in the actual order of the album. Dumbest feature I've seen in a product, maybe ever.
This is an anecdote, and maybe it's just coincidental timing, but these kinds of operational choices do not work well in a company focused on a single product across multiple devices. Losing so many workers so quickly means a loss in productivity on the issues the platform has, and Spotify has many. Since November there has been an issue on PS5 where any podcast over an hour will not play on PlayStation(so, basically all podcasts). People have figured out the issue, and Spotify has not moved on it.
When you offer a single service and the benefit is being device agnostic, "cutting costs" by wasting time hiring people you probably didn't need to hire only to fire them a year or two later means an amplified disruption that will lose customers.
But hey, board members who jerk each other off once a month in a conference call who are already rich made a little more money by hiring a bunch of people only to fire them later and at a huge operational waste.
Explain. Because as far as I'm aware all of the record labels have deals with all music distributors (it doesn't make sense not to, they are in the business of showcasing their copyrighted properties), you can even distribute instantly to all streaming services through labels and distributors.
I don't think you know what you're talking about...
> Apple and Amazon will eventually eat Spotify given enough time, if they don't find a moat to be built
I doubt it.
Apple is restricted to Apple devices. As for Amazon, the same argument could be made about Prime Video eating Netflix, and that never seemed to happen.
On top of that, as far as I know, Spotify is profitable.
Spotify spends millions per month on lavish "creative" team salaries in NYC who do nothing but create gradient playlist covers and other low grade "design" work that is 100% unnecessary. All while they redesign and destroy their UX and product experiences every iteration. All of that money could go straight to the artists.
So effectively contractors. Companies shouldn't be allowed to "shed" this much of their workforce in a system like the US's here we have a very poor safety net.
They bulked up, built their products and now want to slim down and enjoy their profits at the expense of these sacrificial workers.
Your safety net is spend less than you make which should be easy for tech workers who even for your CRUD developers can easily make twice the median household wage.
Were they not paid during their employment? Not to mention everything they are doing for those exiting employees (average five months of severance including healthcare, 2 months of career placement services, etc)
Businesses should be more responsible in hiring not just for the good of the workers but for the company as well. Hiring 17% more than you should’ve means there was a ton of waste. Rather than seeing this as a sign of prudence like most investors might, I see this as a reflection of poor planning.
Literally no business works likes this. Every team and hire is a risk, and the market understands this. You don't have the information to say if there was "waste" and even if there was, so what?
But "poor planning" is inevitable in business. It cannot be completely avoided or accounted for. What should a business do that has planned poorly if it needs to cut costs?
If only employers are capable of communicating that expection to prospective employes in an honest manner instead of doing the whole "we are a family" gaslighting act.
If any tech worker is more than two years out of school and is naive enough to believe that and are not always prepared to change jobs, I have no sympathy for them
You will hear more about the new term "RIF" not - reduction in force.
Nobody likes to say we had layoffs, so corporate speak will be - we did a RIF ...blah blah.
It's terrible, because i love playing guitar, and they are screwing with the english language as normal people use it.
> In the past, layoffs typically came with an expectation that the employee might be rehired if more work became available or the employer’s financial condition improved. An RIF, on the hand, did not come with such an expectation; it usually meant that a certain position or an entire department was being eliminated. https://www.lawyers.com/legal-info/labor-employment-law/rif-...
That "semantic difference" is justification for using the word, but the intent behind using RIF is the usual - water down the harshness of the thing.
I don't buy we need a new word for this.
Particularly this justification is nonsense -
"layoffs typically came with an expectation that the employee might be rehired if more work became available or the employer’s financial condition improved"
Who said this is true?
Like say 30 years ago, IBM fired 30% of people. They didn't need to call it a RIF. Like would they re-hire the people because OS/2 took off?
I’ve only heard the term “Layoff” in regards to a temporary staff reduction in the trades/blue collar/seasonal work. In white collar jobs, layoff has pretty much always meant a permanent staff reduction.
Language is not the same thing to all people. Having two different terms, one for permanent changes and one for more temporary changes, seems useful and beneficial to the language.
For you, the distinction in terms apparently does not exist. But for some, including me, this distinction exists. Would it not be better for us all to adopt the distinction?
> To understand this decision, I think it is important to assess Spotify with a clear, objective lens
... then proceeds to vague MBA word without a single number to support them.
> We debated making smaller reductions throughout 2024 and 2025
What was not debated was keeping people they hired.
> we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact
We're left to guess what this means. What's work around the work? If that work is now unsavory, why can't they work on work rather than around it? Is this describing reducing the management layer? (support) or customer/partner support? Will they be replaced by automation? I get you don't want to go into specifics of who's let go, but then don't pretend you're providing a clear analysis, and don't give a washed out business lingo salad instead.
TBH I don't see what changed on Spotify for a customer perspective in the past few years. I still see bugs I reported years ago, the UI is largely the same. Not that I'm complaining, I just care about the music. But that leads me to think either the dev team is producing stuff that's on the fringe and optional, being quite inefficient, or mainly working on maintenance, and the bulk of the opex is going elsewhere.
This reads to me like "the darn developers are spending too much time not laser-focused on business impact and keep bikeshedding and doing make-work!"
It's impossible to tell if this is what's happening though. It can really go either way.
I've seen orgs where the perf-review meat grinder is driven so tight that engineers are essentially punished/PIPd for doing things that NEED to happen even if they aren't sexy business impact. Like upgrading library versions (not all of them, just the core/most important ones!) so you don't wake up one day and realize you're on a 6 year old version of a core library/framework. Even remediating incidents was treated as "not impactful work". This resulted in the expected shitstorm and teams were literally churning employees because oncall was so bad and just doing anything was so awful, and it took a staff engineer's guile just to get an otherwise-relatively-simple project over the line because you had to be a ninja just to navigate the awful existing mess of 10 years' worth of laser-focus on business impact.
And I've seen orgs where the engineers run rampant, doing random side-quests constantly, junior engineers run amok over-architecting every project with all of the skills their CS degrees gave them, senior engineers make magnum opuses of medium-sized projects, and principal engineers pontificate and aid and abet any and all architecture-astronauting that anyone else in the org does. And naturally none of it was done in any way shape or form in coordination with product.
And naturally there's everything in between. So whether they have a healthy amount of focus on non-sexy work and wish they were neglecting it more to reap shorter-term product-focused gains, or they have too much bikeshedding and they want to be more product-focused, it is difficult to say.
(Naturally the cynic in me says it is probably the former, though...)
If you only knew the PTSD that the expression "laser-focused" is triggering. From an organization that had 12 focuses per quarter, and as many "core-priorities".
> We're left to guess what this means. What's work around the work? If that work is now unsavory, why can't they work on work rather than around it? Is this describing reducing the management layer? (support) or customer/partner support? Will they be replaced by automation? I get you don't want to go into specifics of who's let go, but then don't pretend you're providing a clear analysis, and don't give a washed out business lingo salad instead.
> TBH I don't see what changed on Spotify for a customer perspective in the past few years. I still see bugs I reported years ago, the UI is largely the same.
He didn't get into it because you answered it yourself. And anyone who has used it for a while has most likely the same initial thought.
Frankly I think the UI has gotten consistently worse. Playing saved/liked (Spotify keeps changing the word) songs from a specific artist is still very hard and convoluted. "Now Playing" pop-up panel on desktop was a feature no one asked for. "Your Library" revamp was confusing and solely for the purpose to push podcasts which somehow made it harder to view the podcasts I actually follow. Then comes the dreadful rounded corners on everything but also weird empty spaces around the UI resulting in wasted screen real estate. I held onto Google Play Music until its very last moment, all because of Spotify's dreadful UI.
How many people will be getting told they're part of it? I would suspect this will be hanging over their heads as an unknown element. Is it even possible for HR to manage off-boarding 17% of the company within a month?
> Earlier today, CEO Daniel Ek shared the following note about the company’s organizational changes with all Spotify employees.
> ...
> you will receive a calendar invite within the next two hours from HR for a one-on-one conversation. These meetings will take place before the end of the day on Tuesday
Exactly a formality, something that has to be done. How are they going to handle that in 48 hours? To me, it's a sign that some people get to know straight away and some will find out later.
Severance package is 5 months and Q1 will have no shortage of new job postings elsewhere. Yes this is probably not great for mental health but financially they should be fine.
Having looked at the job market, there are less job postings currently than in previous years.
While overall there will still be more jobs than qualified people to fill them. Let's not pretend like the employee market is full of people who've just been laid off from very reputable companies.
Tech workers need to stop working for corporations they don't own, aren't seeing the profits of, and who will just throw them away at any moment. The solution are businesses in the form of employee-owned co-ops and organized labor.
Tech workers are one of the few W2 employees to see any profits from ownership, hence the compensation in RSUs and stock options. Also, anyone with investments in the public equity markets (like most tech workers earning high salaries) receives gains from the profits.
I consider Spotify like Hulu - existing as a puppet to give "the industry" a centralized distribution service. I don't ever expect them to make a profit, unless they decide to pivot and sell what's left to another corp. Am I wrong?
I think you're kind of right. The thing about Spotify is that my initial reaction was "it's about damn time". It's not like it was technical innovative. Everything needed to make it had been around for at least a decade, they just had to get all the legal stuff figured out first.
It's not a puppet - they are officially part owned (3-4%) by the Universal Music Group. Sony Music Group and Warner Music Group have sold some and all of their shares in Spotify, respectively
I wonder what amount of money will be saved doing these layoffs and how that compares to the overall spending of the company, given that the content streaming rights are probably a huge (the largest?) expense for the business.
It's about appearing efficient to the investors and therefore bumping the stock price and giving a payout to the few big stockholdets, rather than real efficiency. They go through a round of this routinely now, it seems, the letter is more or less the same as what he sent during last year, only percentages of laid off are different. That new version that ChatGPT generated made it more fluffy than last time.
If they were worried about efficiency, they would not have grossly over hired during covid. That's why we need unions.
That's exactly why I'm wondering about the overall improvement these layoffs will make for the business as a whole. From what this blog post is saying, it could be just applying the tactics most of the industry is following at the moment, no to stay behind the others.
It's one of the many strategies to bump up their stock price.
- Harsh RTO -> people leaving, better spreadsheet at the end of fiscal quarter, BOOM, the stock is up!
- Overhire again and make sure to make a lot of fuss about hiring and growing-> ah, company is growing, BOOM the stock is up!
- End of the year incoming, layoffs again -> ah, the company is more efficient, BOOM stock the goes up again!
Managing a company that way: stock value over efficiency, also disconnects the stock value with the actual financials of the company and creates investment bubbles. The C-level and their major shareholders can also massively profit from knowing when the bubble itself is going to pop or even cause a strategic pop themselves by dumping stocks or making public announcements about specific comapny details at the right time.
They win either way, is my point, while at the end, to them people's livelihoods are just a number on a spreadsheet. The answer to that kind of management is:
- strong unions
- strong government control over business and better labor protection laws
- use financial instruments and restrictive laws to tie the stock value of a publicly traded company to its actual current financial performance and its current assets. This one won't happen for many reasons :)
This is, to an extent, exactly what is happening now, specifically to the group of people what Musk refers to as 'the laptop class'.
The high salaries and good benefits we enjoyed in the industry could only last so long. The pandemic came and it was then when the behemoths overhired and boosted their stock prices, and were happy that we managed to make them money remotely.
Now that the pandemic is over, they seized the opportunity to crack down on remote work, reduce their headcount, and one more time boost their stock price, while at the same time showing the pesky engineers who is boss. Oh, and when Twitter started with the layoffs, suddenly all of them were overstaffed, AWS, Microsoft, Spotify, you name it... The layoffs then suddenly meant a market that was hot and starving for engineers, was flooded with good and highly qualified people. And poof, went out bargaining power. The tech giants collectively benefitted from their collective actions, while we were left to compete with each other in a very difficult market.
I know that for many of the US based folks this is natural and somewhat acceptable, but things don't have to be that way, this is avoidable and preventable.
Strong unions world-wide, and good labor protection laws is the antidote to corporate greed, which, if left unchecked, will throw everything and everyone under the bus, just so they can temporarily squeeze out a point or two in their stock price before the whole world burns.
Workers in the US are routinely and in large numbers thrown under the bus by their corporations in search of profit. Many don't have paid paternal/maternal leave, low or no vacation days, not all employers cover medical costs, and you can be fired more or less on the spot. Now this treatment simply is getting extended to the previously privileged "laptop class". Spotify is an example of the rare EU "unicorn", it's just sad to see that it is managed the American way.
In Europe even fast food workers or servers/waiters are paid a reasonable salary and have vacation days and their medical costs covered by their employer. Also, labor laws in Europe are much stricter and it's harder for a company to fire their workers so easily. Just see what the unionized Tesla workers are doing in Sweden. In terms of worker rights and job security, US simply doesn't compare to Europe.
It's good that at the very least the laid off workers in Sweden will get unemployment benefits from the government, in addition to the severance Spotify pays them. I believe it's something that amounts to monthly payments equal to 70-80% of their salary for at least 400 days. That, hopefully, will ensure that they have plenty of time and opportunity to find something else.
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.
Yea I understand that, but whats the point of that strategy if users don't want to even subscribe to podcasts in the app because how bad the UI is. It's like they've never used a podcast app before.
Post-pandemic, the trend of Corporations raking in higher and higher profits, while needing fewer and fewer staff scares me.
The most obvious and likely outcome is it drastically separates the ultra wealthy from middle class.
With rise of AI and automation, that trend will likely accelerate. The top 10% hold more than 50% of wealth. It's likely in a few decades, the top 1% will hold more than 50% of the wealth. They already hold 28% of wealth.
I suppose I appreciate that the CEO was mostly honest about the goals and what the business actually values. “Supporting work”, ie operations, maintenance, etc is considered worthless. Near term financial ROI is the only metric that is important. Investments in the long term health of the business and treating employees with respect are of no consequence.
We all know this is true, but so few layoff announcements are willing to spell it out.
That said, the thing that’s missing is accountability of the executives. They overhired and overinvested in 2020-21. Where is the accountability for their massive failure of leadership?
They are doing a lot, including open source. Out of curiosity is anyone using Backstage at their place of work for developer portal? Is it providing value? Should Spotify double down on that?
Yes, it is being used at my place of work. Extensive work is being done internally to make it the portal to everything a developer needs. Its definitely a great product and more work should be done. Spinning it off into its own entity would not be a bad idea, if they can deliver a lot and introduce a good SaaS pricing around it, with prices that should be comparable to what self hosting it in a kubernetes cluster would normally be, and not something what most companies are doing.
This absolutely sucks for those involved, especially given the timing. Not only does it add stress to an already stressful time of year for many, but hiring typically slows down in December anyway. That said it's good to see five months of severance pay. Hopefully long enough that the effected folks can take a little time off to refresh themselves, not stress about finances, and give the industry time to pick up hiring again in 2024 once new annual budgets kick in...
Now everyone sees just layoffs again. But there are so many companies thriving and keeping their workforce. As they are in balance. And are also happy to grow at a smaller pace.
This is so important, growing at a small and healthier pace.
Some companies try to make the reason of their existence to grow as fast as possible, no matter what.... and in the process they destroy the value they originally offered to its customers, processes, people and quality controls.. for what?
Napster and, later, streaming caused me to experiment a bit more. But although I picked up various artists and genres over the years I'm still pretty rooted in what I liked during college and early adult years. If my access to streaming were cut off tomorrow, I'd be pretty content with my mostly ripped from CD music library.
Firing people is business as usual. I don't know why this is usually taken with such surprise.
It's part of the life cycle of many companies to hyper-hire when money flows in, and cut lots of jobs when they "re-adjust". I don't think this is good, I personally don't like it, but I learned not to be surprised anymore.
We like cloud because it scales in and out: often management don't see workforce differently.
In countries with functional labor laws, it's straight-up illegal unless you're basically going through bankruptcy. Mass firings should only happen if either 1) there's a very significant economic crisis going on, or 2) the company is doing so poorly its immediate future is uncertain.
The Silicon Valley style mass-hiring followed by mass-firing style of management is indicative of poor management. In a well-run company this should never happen, as the same could be achieved by simply reducing the hiring rate and letting natural attrition take care of the rest.
Or, if you want to win big, you have to make big bets. This applies to both employers doing mass hiring and employees choosing to work at employers aiming for explosive growth.
It is not poor management, it is simply a different tactic. Sometimes things work out, sometimes they don’t. The fact that Silicon Valley has succeeded in producing the most profitable companies in the last few decades seems to be relevant.
Spotify has been around for 15 years, and its IPO was 7 years ago. They are well beyond their "explosive growth" phase, and anyone working for them could not be faulted for expecting to join a mature and stable company.
I can definitely agree with the "bet big" argument for startups - but Spotify isn't a startup and hasn't been one for years. It's a billion-dollar multinational!
Let's not romanticize correlation. Silicon valley also spent years asking how many ping pong balls fit in a bus, only hired Stanford grads, and sheltered sexual harassers in executive roles. Turns out those were neither necessary or sufficient for success either. Revenue and low interest rates can hide a lot of dumb decisions.
You wouldn't think that most people here would be campaigning for companies to hire much more slowly, conservatively, and probably at salaries more in line with the market as a whole.
Software industry is a giant bubble 90% of the time, so it's usually the first one to go. But no most industries seem to be hiring averagely to better then average at least as per the JOLTs report.
Software companies are pretty uniquely positioned such that they have far more employees than are operationally necessary.
Not to say that those employees don't provide value, but the spread between operationally stable employment levels and current headcount is far wider than other industries.
During COVID, software companies massively overhired, because the executives in charge went all "hurr durr, digital is the future boys! Nobody is going outside anymore!". Not to mention the government was handing out money like candy through various schemes complete with low interest rates. I believe Facebook (as example) alone went from a headcount from 40k to over 80k employees in just 2 years of COVID.
2022+ was the "return to normal" with online trends quickly reverting back to pre-COVID levels. This resulted in a sudden drop in online economics (such as ad spend) that could justify the bloated workforces.
Drastically increased interest rates to fight inflation also cut off the cheap money flow to companies that would previously burn it like crazy on "R&D" and the like.
It's the end of the internet service software business cycle. This plus a ton of unprofitable VC funded companies unable to get the funding they were hoping to get with interest rates up lead to a massive pullback.
Will things change next year? Maybe if some IPOs hit and the VC pump and dump pipeline gets back up and running.
A lot of these companies have people doing no real work, even afterwards of layoffs, they're bloated. You can't layoff essential people otherwise you die.
You can look at companies like Spotify and Twitter, they ship like one feature a year if you average.
Only to a small extend. Mostly it happens in software. And no it's not just "overhiring" (that doesn't happen across so many industries). That's only part of it. We all know with AI we won't need white collar jobs anymore. If I had children I wouldn't allow them to study CS. Not anymore.
What would you have them study instead? If you're optimizing for what AI is least likely to be able to accomplish, some forms of blue collar labor would probably rank highest on the list.
I feel like you're overestimating the impact of AI on the current wave of dismissals. It's hard to say without any actual data, but there seems to be a lot of FUD regarding AI replacing white-collar and CS jobs.
I don't have better data than you, but I'd be very much surprised if AI would replace computer scientists rather than being a tool which will change what we'll have to be good at as computer scientists.
There is a lot of digitalisation to be done and AI might change the price of doing that, but it won't make a whole academic discipline obsolete.
> Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact
This is one bit I don't understand. You either unionize or don't. If you do, you do it fast or you lose it.
All management hates unions, and especially the management of SV companies. They will do everything to crush it. So you either do it fast or lose employees as the management will attack first.
Spotify is a completely mistery to me. I'm asking: What does Spotify really have? They don't own the music. They don't own podcasts (OK, they may have some exclusives like Rogan). All they have is a license, a bit of software, and lots of users. How will they ever turn a profit? What's the end game here?
I just switched my whole family from Spotify to Deezer and it was literally a matter of minutes. There are even services that move all your favorites/playlists over and it worked flawlessly.
Spotify is a sales channel. Walmart doesn't actually make anything, US car dealerships don't make anything. But they have customers and that's all it takes to sell something.
And, strangely enough, once a sales channel is big enough it can begin taking a bigger slice of profits and telling suppliers what they should be doing (a la Walmart).
Walmart doesn’t technically make anything (not sure if it’s true to be honest) but they probably “enable” a lot of manufacturers to “make things” under their Great Value brand
I suppose one could argue whether Walmart's primary value-add is sales or whether it's logistics, but certainly either of those is a higher priority than making things for consumers to sell. House brand items are still produced and packaged by some other company.
The "logistics" of Spotify's business are mostly commoditized (storage, computer, app development), but certainly they have label relationships that would be hard for a new competitor to replicate. But the key part is that for whatever reason 226 million people have given Spotify their credit card number (or local analog) which makes them pretty important to record labels.
Yeah it's just playlists and network effects, mostly.
There's a Spotify playlist for everything, young people regularly share Spotify playlists each other, and for many: the hardest part about switching to another service is losing access to those playlists.
The "official" playlists provide two other functions. One is to initially amplify artists. Record labels can buy slots on these playlists, just like they used to buy airtime on the FM radio stations of yesteryear.
The second is that Spotify can use its own filler muzak on its playlists to keep licensing costs down. E.g. they pay a pianist to play generic "Christmas piano music," make up an artist name, and put a bunch of those songs on its official holiday playlists.
As far as I can tell, its biggest beneficiaries are the 3 record labels who can use Spotify being one of its customers to be able to negotiate better terms with Apple/Alphabet/Amazon.
Deezer is a completely mistery to me. I'm asking: What does Deezer really have? They don't own the music. They don't own podcasts (OK, they may have some exclusives). All they have is a license, a bit of software, and lots of users. How will they ever turn a profit? What's the end game here?
I just switched my whole family from Deezer to tidal and it was literally a matter of minutes. There are even services that move all your favorites/playlists over and it worked flawlessly.
Spotify Connect is a real game changer. I tap a song on the web player and it streams it on our living room amp, which supports it natively. No apps involved whatsoever.
This has been the biggest feature keeping me on Spotify.
Tidal sorta has a connect feature, but I've found it to be really buggy (often wouldn't play or wouldn't tell the remote control device what is playing) and not as widely supported.
Apple Music is even worse since tends to rely on AirPlay, which murders quality and requires the remote to stay on the same network as the player.
TBH - this is the first time I've heard of Deezer and looking at their website - they seem to have ripped off every feature that Spotify has, including the end of year 'wrapped'.
Have they replicated it widely though, and does their stuff work as seamlessly as Spotify's? Rather than look at hypotheticals about what others might offer, look at the present overall experience.
> Do you think this is impossible for other companies to replicate?
They are welcome to do so at any time of their choosing. It's only been an entire decade since the feature launched, I'm sure the competition will figure it out soon. For the most part, the only one I've seen that has more features than what is provided by basic google cast / airplay is ironically Youtube Music.
I like their music discovery functions e.g. generated playlists and song/playlist/artist "radio". My playlist variety expanded greatly over the past 3 years because of these features from Spotify. A centralized platform that is relatively to use (nonsensical UI changes aside) is a strong incentive for users to stay, though by no means a moat.
The end game was always about rapidly burning VC money to acquire more users, while kicking the can of profit-making down the road. Now ZIRP has ended for the time being, the chicken has finally come home to roost.
Parental control. Spotify has basically no QC on uploaded podcasts, and it is filled with video podcasts with stupid TikToks, porn disguised as "ASMR", and lots of garbage used for money laundering.
Meanwhile I cannot see anywhere what is the streaming quality for Spotify on my Samsung TV. Please put a text label somewhere in the currently empty settings page. It should take 1h of programmer time. Granted, if what I suspect is true, i.e. the streaming data rate is too small (not configurable), then I might switch to a different streaming app :)
I predicted this......their API v2......that was all I needed to see you know they were firing a lot of people......they need to get profit somehow and they have no knowledge at the top....so they do what all dumb companies do....flounder until someone saves them....so cut cut cut.
The Spotify inserted ads during the podcast makes a lot of sense now. They are really trying to make the books look good. Is this a leading indicator that the podcasts could go more towards the exclusives / originals route? For example: Like Joe Rogan.
Spotify is actively moving away from originals (or at least changing how they do it). Inseted ads gives them better tracking and with better reporting… $$$$
lol why does Spotify even have so many employees to begin with. Doubt it was 1600 tech jobs cos they don’t need anywhere close to that to run the service.
Should have fired 80% of their employees years ago when service was reasonably feature complete. Not that I don't sympathize with people getting laid off, but feels like past a certain point, more heads changes products faster than can be fixed, and sometimes moving fast degrades what shouldn't have been changed in the first place. NPR acquisition drama aside, pocketcast has like 25 employees that makes the service slightly better every year while fixing obvious bugs.
Sometimes I don't understand how jumping from winamp to spotify goes from a handful to 10000 employees. Winamp + audiogalaxy (ah memories) probably covers 90% of spotify use case with probably 10 engineers, then just get some suckers to curate playlists for free.
I imagine there's a big team dedicated to getting inventory on the service through negotiations with music producers around the world. You'd need to keep them to continue expanding, adding newly produced music, and re-negotiating expiring deals.
There will be a large editorial team producing playlists, curation, tuning the algorithm with expertise, etc. That all needs to be localised and to cover lots of niche music tastes. That's also not evergreen content or work, it needs constant updates to remain relevant.
Then there's international expansion and enabling the tech to work for more countries, more languages, more payment methods, more types of music publishing.
Product stand-up, agile stand-up, team fika, cross-team fika, town hall, team activity, tribe activity, one-on-one, backlog grooming, team retro, incident post-mortem, ping pong, live music.
If you do scrape together a few minutes to get part of the codebase into your head (despite the open-floor-plan chatter), you've got no way to trigger that bug you think you saw.
But persevere anyway and diagnose it. Oh it looks like it's happening in someone else's microservice. File a JIRA? Bring it up at the next meeting? Try a different fix anyway. Happy with the fix? Wait in pull-request limbo until it's sorted. Release it straight into prod? You could bring down prod... Maybe you didn't really see that bug after all. Coffee time!
Except it's not just that, is it? They have more than one product. They have the desktop app, the web app, iOS app, Android app, apps for smart TVs, apps for smart speakers, internal admin apps, apps for artists, apps for venues, apps for labels.
Even if you narrow down to focusing on just one of those like the desktop app. There are so many sub-features. Playlist management, playback management, search, audiobooks, podcasts, merch, event ticketing, groups, collaborative playlists, local files, upsells from free to paid, notifications. I could go on.
I think your representation of a software engineer's work is made in bad faith. There may be some like this, but from anywhere I've worked and anyone I've spoken to in the industry, it's a small minority. I haven't worked at Spotify but I have worked with an ex-Spotify engineer who was very productive and one of the best engineers I've worked with.
The representation is in bad faith because it overstates the balance of non-coding tasks, but also because it assumes these are "not work" or worth less than coding.
200m on Rogan has caused more than few of my friends to drop spotify permanently because they couldn't get him off their home screen recommendation for months. If only one engineer added a dismiss button.
Yeah but the dismiss button has to be directly tethered to the machine learning analytics that is also tied to the retention team, so if too many people trigger it, the retention team is alerted to a potential user-retention risk. You need to write the API to hook into those two services, then make sure you have benchmarks before your pull-request will get approved.
You could do this, but I think the profile pictures would look better with rounded edges.
Note: For all I know, they really could be making that error. Or perhaps someone inside Spotify feels the need to make the Rogan investment at least break even, consequences be damned.
I want to dismiss Rogan as much as anyone, but I think this underestimates the complexity involved. It's not just a button, it's what the button does, it's respecting opt-outs like that in a scalable way for many millions of customers, it's having a way to un-do those for users and for support agents when customers inevitably accidentally hide a podcast they want to see, it's GDPR data export and deletion of those flags to hide things, it's UX testing around whether users even understand what the button does.
I agree that a good product would do all these things and have a way to not show recommendations you don't want, but I get why these things might not exist.
When I worked in a <100 person startup we'd "just build it" and I'd probably spend a few hours on this, but we didn't have all these concerns. We didn't do user testing, we didn't care about scalability at this level. Now I work on Google Play, and if you want to add a button like this (that will need a database query) to a frontend it's a ton more work because the scale is so different.
> I want to dismiss Rogan as much as anyone, but I think this underestimates the complexity involved. It's not just a button, it's what the button does,
This is the kind of statement that leads to people saying "Should have fired 80% of their employees years ago when service was reasonably feature complete." by making it sound like a big development team creates an unwieldy product then struggles to implement even the simplest of features.
The button is absolutely not missing because of any technical difficulty implementing it. Spotify is already storing per-user preferences - and doing all sorts of algorithmic stuff to make smart recommendations and suchlike, all with the ability to scale.
The button is missing for a business reason: They want their purchase of Rogan to be a success because they've spent a lot of money on it.
> The button is missing for a business reason: They want their purchase of Rogan to be a success because they've spent a lot of money on it.
Precisely. If everybody was opted out by default, podcast growth would be anemic, and the product managers would find themselves on the list of people losing their jobs.
No, they're right: your understanding of each other diverges when you write "it's not because of any technical difficulty" --- correct, we all agree there. However, it is still difficult.
Big companies have big processes and that, at least at Google, would have prevented this from happening for at least 12-18 months. Then those things aren't pursued because of A) the literal cost of getting that arranged over 18 months B) the individual's decision not to invest in beating their head against a wall for 18 months for something that'd be done in a week if leadership cared. Leadership does not care, so QED, it will not be a positive for your career.
Things either get done because A) leadership cares and has skin in the game and everyone is afraid of getting in the way of whoever delivers B) leadership cares and will keep asking about it over and over again for a year or two or C) no one cares so no one will get in your way.
That's also the crux of why things at Google go sideways. A) is only true over a year long cycle (I.e. you need to get to launch) B) people are afraid to do because it's hectoring and C) if no one cares its probably not much of a game changer anyway, there's no incentive to do it, and especially in FAANG's Efficiency/Focus(tm) era[^1^], you can actually get pretty easily brow-beaten for it by middle management. Then what are you going to do? Appeal to a VP that your manager and managers manager are big ol meanies?
> Big companies have big processes and that, at least at Google, would have prevented this from happening for at least 12-18 months.
Well gee, if all these software developers are making them slower at software development, it sure sounds like they should have fired 80% of their employees years ago when service was reasonably feature complete.
It's not the software developers. Companies and processes aren't run by software developers. I wish you were more curious about the gap between your understanding and others, it'd be a much more enlightening discussion with your interlocution, as it stands, we keep circling back to "all companies with long launch lead times should fire 80% of their software engineers"
danpalmer believes ads for Rogan can't be dismissed because of 'the complexity involved' in specific technical areas such as being scalable; providing a GDPR export; offering an undo option; and providing a comprehensible user experience.
I would say questions like scalability and data exporting fall squarely upon the software development arm of the business; and if they had chosen an architecture which made it hard for them to deliver value, that would reflect poorly on them.
I am also arguing they probably didn't choose a bad architecture, because I don't think a technical issue is making it difficult to dismiss Rogan ads.
It's far more likely this is the same as Youtube making it difficult to dismiss Shorts, and Amazon trying to trick you into a Prime subscription every time you check out: They've decided their strategy is to make a number go up, and your personal experience is less important to them than that strategy.
I get you, but at the same time I'm more than little suspicious that they paid 200m for Rogan and just happens to plaster his face on my podcast tab like a permanent ad for months on end. IIRC it was right after also just acquired Bill Simmons also permanent thumbnail, basically fully visible unlike the third listing in the carousel that required scrolling. I find it hard to believe they couldn't rotate recommendations, or move it below the fold. This complaint was all over their forums, reddit, social media at the time. Their default answer on forum was, not yet, but features constantly coming. Avoided all the question of why can't they just remove the banner until feature implemented. I buy scaling features for 500m users is hard. I also buy using technical complexity is a cover for other motivations.
For something as simple as a dismiss button for a particular promotion, it's reasonable to store the bit on device. This will work for mobile and desktop apps, which I assume are the vast majority of Spotify usage.
Or they could invest in a generic "misc settings" column in their DB - to store random stuff like this in a blob. You could even query/index on them w/ something like Postgres's JSON support.
> For something as simple as a dismiss button for a particular promotion, it's reasonable to store the bit on device. This will work for mobile and desktop apps, which I assume are the vast majority of Spotify usage.
No it isn't. When you "dismiss", the service needs to have a point of view (or UX to clarify) whether you want to dismiss it permanently or temporarily (I'm not in the mood for it right now).
You also need to deal with the cases where someone accidentally hits the button.
You also need to think about people who use multiple devices.
Should the algo's now update to say you don't like podcasts? You don't like talk shows? You don't like podcasts with themes that Rogan covers - what themes would that be?
Well, sure, there's infinite room for scope-creep. That doesn't take away from a minimal solution that works well from the user's point of view - "I don't want to see this, make it go away".
Now take that thought and apply it to someone proposing to put a permanent Rogan-ad on the home screen. One of the first things that is going to come up is "but how can users remove it?" At the level of thought you're talking about here, someone somewhere already made the conscious decision to not make it removable.
It's not that crazy. Not Rogan-specific, but the podcast-first UI prioritization made Spotify on CarPlay a pain in the ass to use. There was no option to say, "No thanks, just give me music only going forward." Spotify clearly didn't want to serve my needs (i.e., to access music quickly), so I took my business elsewhere.
It's crazy to stop using a product because it's UI got worse by pushing content you don't want at the expense of what you do want?
Ignoring the Joe Rogan of it all - it's frustrating to open spotify to listen to music and it the page is full of overly produced podcasts instead. I think that's a pretty normal reason to not like a product.
That's like saying people dropping Windows 11 for pushing Candy Crush and TikTok in the start menu si crazy. Is it really crazy? I don't think so.
If I'm a paying customer I want to be treated with respect. If you keep making my UX worse to push your own agenda I WILL drop you for the HDD of "definitely legit" MP3s ready to go.
I'm probably not the common usecase but I don't use Spotify for recommendations either.
I hate recommendation engines in software. One of the first things I always turn off when I install Spotify is the "When we finish your playlist we'll just keep playing similar music we think you'll like" option.
All I use Spotify for is to save myself the trouble of maintaining a media server and tracking down all the music I like to put on it
>You don't buy the OS for entertainment recommendations and listening/viewing/playing/reading.
Huh? I definitely use my OS for entertainment but I don't want it to shove their own content in my face, same how I don't want that from Spotify. If I want to discover new content, I'll explicitly seek it out, otherwise GTF out of my way and play my songs.
I didn't switch because of Joe Rogan, but Spotify kept changing the UI and at some point it got so annoying to browse music over the crappy podcasts being shoved in my face that I switched to Tidal.
It's kinda like how I judge most for-profit businesses based on the checkout experience. Usually (there are certainly valid exceptions), the process of me giving them money is what I expect to be the best experience I will ever have with that company.
Am I going to refuse to shop at a store simply because nobody cared about a payment process? No, not unless it's particularly painful or damaging to me in some way.
However, it's certainly a red flag and a warning that the rest of my interactions with them aren't likely to be better.
Same with the case here. If the landing page for a service product is so heavily pushing particular content in place of actually being useful for them, that's a pretty big red flag.
tl;dr by itself, it's a silly reason to drop it, but it can definitely reveal where business priorities currently lie.
Why not? I don't have time for many ads and will go to great lengths to get rid of them - especially ones I don't like. With Spotify this is even easier because there are a number of replacements available.
I think I'm using a different app to the rest of these commenters, I don't have anything as bad as people are talking about. Or do people just use the free version of the app?
I stopped my sub after Rogan AND Peterson pinned on my homescreen, and it just wasn't worth any drama it could stir with how often spotify is passively open. I like me the occasional Rogan, but Peterson is not someone I want to associate with, especially where I am, who I'm generally with, even accidentally. Like it's just dumb shit design for no good reason.
It was enough of an issue that I remember multiple support threads topics at the time.
Switched to plexamp for a while. Half a year later, I'm free riding off someones spare family plan slot.
If I had Spotify open and Peterson was pinned to my Home Screen in an office setting, I’d be embarrassed. It would be a strong signal of a lack of education that could harm my professional career.
And the the "tolerant" Left wonders why the Right is so upset at them, and the response globally is the election of strong pro-nationalist, "populist" candidates.
Why should someone walk around afraid of being seen associating with Joe Rogan or Jordan Peterson? They're certainly not promoting Jewish genocide, unlike others.
I never claimed to be tolerant ;) Listening to Rogan or Peterson are indicators that you might be into alternative medicine trash like horse dewormers and vagina rocks; or you might oppose public health policies, or gender care for people dissimilar to you. There's an entire universe of podcasts to listen to on every possible topic, and you choose to listen to the one that hosts quacks. That's not the kind of person I'm interested in supporting or associating with, hence the side-eye thing.
Or they simply see this as the indictment of American society that it is. People preoccupying themselves with such obvious, dim-witted charlatans can disgust anyone, regardless of their popularity.
> I stopped my sub after Rogan AND Peterson pinned on my homescreen, and it just wasn't worth any drama it could stir with how often spotify is passively open.
If the image of the most popular podcast causes drama then it's those people who are on the fringe.
- daily updates is gone. This is where I can get a snapshot of all new releases from artists I love. I’m not sure if Release Calendar is the new one but I don’t bother to check.
- I listen to classical and the song title naming is just subpar. For example, “Well-tempered Clavier, Book 1, J.S Bach, Angela Hewitt, Prelude in C Major is too long to be in the title. Especially, the rat if the album is just a repeat alternate between prelude or fugue and the chord.
- recently play list stopped syncing between my phone and my desktop app after 2022 for some reason. Is it a bug or they just stop doing this since it costs more to sync?
I probably won’t switch to a different stream service for now as there is not much differences for me to migrate.