Spotify to axe 1,500 workers to save costs
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Spotify to axe 1,500 workers to save costs
https://www.bbc.com/news/business-67611361
The music-streaming company says it is making people redundant to "rightsize" the firm.
https://www.bbc.com/news/business-67611361
The music-streaming company says it is making people redundant to "rightsize" the firm.
They also bought Michelle Obama and Duke&Duchess of Essex as podcasters. Not saying these are equivalent to Rogan, just that they seem to be burning money on things that has nothing to do with music. And I'm very much not a fan of fucking up podcasts as a simple medium delivered by RSS. I have a futile hope that that decision will burn them.
They're investing heavily in podcasts because podcasts are far, far more profitable than music. If they can get people used to (and hooked) on listening to podcasts (any podcasts) through Spotify then all that money spent on popular podcasters will be worth it (in the end).
I'm sure Spotify would love it if they could stop streaming music entirely and just focus on podcasts. Streaming music costs them a ton of money and overhead (bureaucracy associated with keeping track of and paying artists globally with bazillions of laws and regulations and fees to navigate) whereas podcasts just cost bandwidth.
I hate that you’re right. I listen to 0 podcast, it’s just not my format, yet they constantly push it in my face
And I'm very much not a fan of fucking up podcasts as a simple medium delivered by RSS. I have a futile hope that that decision will burn them.
This was the straw that broke the camel's back for me. When they started locking up shows to their app, I cancelled my subscription and dropped Spotify entirely. I don't even listen to any of the shows they bought but I do listen to a lot of podcasts through Pocket Casts and take umbrage when anybody fucks with the standards.
Big tech used to be built on the idea that you could work on a moonshot idea, have it fail, and then be reassigned to something new, or swallowed into new orgs. This way, you could work on the next Zune, Fire Phone, or Circles, and not fear for your job - like you would if you worked for a startup.
Now, they don't give a fuck. If the moonshot fails, they move the exec to a new org, and fire the entire team. It means that companies like Spotify can diversify their offering while saving money, and due to the poor hiring market and general apathy of tech workers, they just deal with it.
I think Joe was out of things to say 10 years ago. You could replace him with AI and never know the difference.
You can be pissed off but he is still the number 1 listed/watched podcast in the world. It brings in subscribers.
He has done a lot to help spread things like anti-vaxxer lies. He's given platform to shitty right wingers and treated their ideas as reasonable alternatives to more mainstream views. He generally has presented his views as moderate and he's "just asking questions" which seems disingenuous.
He generally comes off as an idiot who likes money, but being responsible about what he allows on his show is not a big concern as long as the dollars keep flowing
I agree. Doesn't charge reality. Man it's hard for people to accept Rogan prints money and the comment made no sense.
They could easily pay those workers by terminating the contract with Rogan
No. Rogan brings in subs. He sells ads. He is the most popular podcast on the planet. He makes them money, Spotify isn't a Joe Rogan charity.
The hate I'm getting for pointing out objective reality is pretty terrible. There is a whole lot of copium around his popularity.
Just as they announced their profitable quarter.
This isn't to "Save costs". It's to further boost profits at any measure, which is what publically traded companies want. Happy investors.
Maybe not rehire, but many companies will actively continue hiring just as many as they lay off. Citibank did this for years. Announce layoffs of 5,000 employees, stock goes up, but also hire 5,000 with no announcement.
Does it eventually kill the company to do this? In many cases, yes.
I know people who support this philosophy (business owners and investors, of course), framing it as getting rid of the lowest performers. They think 10% yearly turnover is healthy. Morale is so low at the businesses they run they usually don't have to lay off. It's probably more like they lose their top 10% yearly.
Rarely. They'll hire for some teams, but the roles were eliminated to directly reduce their headcount.
Companies want a revolving door of talent, but they also want fewer people...
Probably devs, updates, the verification and review process for music, reports. Apparently they also create playlists by hand.
The annoying ads also won't create themselves. There's a lot of effort being put into making them as annoying as possible actually.
Wow, i really need to stop using spotify. 9000 people somehow created the worst algorithm possible. I have 800 songs in my playlist and their "randomiser" is the worst thing i have ever seen. I accidentally added one stand up track and all their enhanced randomiser adds are comedy tracks. And not even new ones, it's always the same ones. The app is dumb as hell. Click a odcast accidentally and never get rid of it from the home screen ever again. Instead of paying their artists or apparently workers, they aquire shit like joe rogan.
Yeah, their smart random, or whatever they call it, is horrible. Thank God clicking it again removes the garbage it added to a playlist.
it's been draining battery like crazy for me recently. I'd listen to music for an hour in the morning, and in the afternoon it'd show up as the first or second position on battery stats with "10 hours in background". it would also take its sweet time to load a playlist that I've downloaded for offline use when I was in a poor reception area, I assume because of the playlist "enhancing" or "smart shuffle", even though I've had those disabled. I've decided to temporarily move over to Deezer until I use my subscription to rip my music library, and then go back to using a local music library as the lawd intended us to do.
Only reason I ever used it was because my ex had it at the time, after we broke up, I said good riddance.
Each of those should be a team, not a 1k+ person department. A few tens of engineers for dev, the same for QA and DevOps, then maybe a few hundred employees for all the review processes, marketing, relationships with music labels&advertisers, etc.
Discord famously runs (ran) with 50-odd engineers. Silicon Valley's VC-backed economy is famously terrible with over-highering by orders of magnitude, and since interest rates went up some of those companies realized that maybe they should stop burning so much money.
You have to keep in mind that they operate all over the world. Each country has its own labels and messy negotiations to do. Doing literally anything on a global scale takes a lot of people, no matter what it is, just to navigate the differing business environments.
So we should expect their legalese and marketing departments to be the heaviest staffed then, right?
Mind, I'm not disagreeing with you, you make a very good point. Licensing is arcanely complex, and it's different for every country. Also makes sense to me that legal and marketing would be significantly impacted by all this.
Almost like you'd need a top level org for both legal and marketing (2 orgs) then sub organizations for each country/legal domain.
Seems like that could require quite a few people.
Edit: holy non-words, autoincorrect.
That's my point. But not "9000 people" many people. That's an ABSURD number, that's almost certainly more people than there are record labels with nonstandard/custom contracts with spotify...
Trying to come up with rough IT numbers and I don't think I could break 500 (depends on how much they self-host and not considering contractors). Even if I bump it up to 4500 it seems insane for a large "digital distribution" company to have 50% of its workforce to be non-IT.
My buddy works there now, as the audiobook company he worked for got acquired by them.
You would be shocked how stupid and manual the content acquisition process is. Book publishers might as well still be operating back in the 90s, it's all phone calls and spreadsheets attached to the emails and manual FTP uploads.
If the music business is anything like the audiobook business they likely need so many non IT just to keep the machine fed with content.
That is what I was thinking, too. Maybe it's really just marketing, hand curated content like someone commented or something else non technical.
I saw banks being maintained by 10-20 people.
It doesn't surprise me all that much, as someone that works for a big tech company.
A small number of that will be IC's and managers that keep the services going, alongside people that create FOH stuff. Alongside that, they'll likely have a lot of people in data storage, data science, perhaps even research science. Put these across multiple continents and timezones, and you've likely got a few thousand.
The majority after this are likely upper management, sales and account staff (you'd be shocked at how many of these exist in media tech), and internal teams. Again, put these around the world, maybe even more so, as some account staff will work with people in local markets, so you'll have people in dozens of countries.
Operationally, they need nowhere near this amount, but if you want to achieve "growth" you need all the supporting stuff.
I said, 'fuck it, why not?' when the whole joe rogan boycott happened. Have not missed Spotify one bit since.
In a lot of ways, this is where I'd like to be, but my mind hesitation to jump from Spotify (and comparable services) is the ability to discover new music across a crazy variety of genres. Especially since it's stable and uses the same controls every time, I think I'd have a hard time leaving.
Big tech got me addicted like that.
That’s the only thing I don’t self host. I enjoy discovering new music from various genres. I reminisce of the days when you would ask someone to send you a track you just heard over Bluetooth to your Nokia.
Last I checked, when it says only a day long, it was 15 GB. It's been a few years.
A lot of these “auto-pilot” apps have thousands of people employed, I don’t get it. Like, what is there to work on once you have things working pretty well? If anything they just start ruining the product over time…
Tbh most employees at a company this size become risk mitigation more than anything else. Once you've reached a certain level of success, you're looking at what doesn't move the needle as much as what makes it move positively. There could be a feature that is a major QoL improvement, but because in a test segment it performed 1% worse than base then it won't be implemented.
Spotify, I believe, still works in the tribe and guild model that they created.
Chapter = people with the same skill set, squad = a group of people from different chapters focused on a single project, tribe = a group of squads focused on a large business goal, guild = a collective of folks who have a shared interest like Data Privacy.
Suffice to say, Agile is an imperfect tool and as you try to scale it, you need an increasing number of people to support it and make it run. Coders and Designers are likely just a fraction of their head count.
I've worked places that don't have that support structure in place and they've stagnated for years struggling to get the most basic of decisions made. Decisions is what it is about too. Rarely do you get actual leadership from the c-level and especially from a CEO. So you end up with a lot of cooks trying to work out why the broth doesn't taste quite right and lacking confidence to just add a bit of salt.
Probably data-analysis/AI type stuff to track users and advertise "better," making the backend more efficient to reduce costs, and adding support for new hardware. A lot of big, very profitable companies also have skunkworks-like projects for exploring new ideas and prototypes, most of which never make it into production.
To be fair, even Apple Music and Tidal are trash on Android. And Apple is a $3 trillion company with over 150k employees.
It's both amazing and annoying that Google is perfectly able to create useful apps for iOS (despite the huge limitations the OS imposes) but Apple can't figure out how to make any Android app that isn't utter crap with fewer restrictions imposed on them.
I blamed my Subaru for a lot of my issues then i switched apps and amazingly every single issue went away.
The app exists in its current state on purpose. The idea is not to give you a seamless and masterful listening experience. If it was, they wouldn't compress tracks to 192kbps or less. The idea is to keep you trapped in their ecosystem and give you just enough value to not cancel your subscription.
My guess is for every 1 developer there's 10 or more non technical administrative jobs. Most tech companies are grossly fat worth useless non productive employees that do very menial bureaucratic work. Think Office Space, but less neck ties.
If the workers of Spotify had been unionized then the CEO Daniel Ek wouldn't have been able to fire 1500 people by sending them an email.
The point is to make as much profit as possible without losing too many subscribers. This includes cutting expenses both internally and externally
Not really, they set a "minimum threshold" of unique annual listeners to get a payout. If a song has at least 1000 unique listeners per year it gets the same payout it did before. If it gets 999 it gets zero.
The change exclude payouts that are under 1 cent or something like that. The news got hijacked by click and rage baiters like this title by the Guardian (which I won't link):
Spotify made £56m profit, but has decided not to pay smaller artists
The smaller artists would literally get single digit cents! The Spotify hate is getting astroturfed hard it almost seems.
You say that like it's a defense though.
Yeah they're paying the people who make the product we sell so little that they don't even get enough money in a paycheck to have it be worth sending them a paycheck!!
Should spotify offer more money for less views? Maybe. But 1000 views being a threshold (and only valued at a few pennies with their current model) sounds to me like the paper they write the check on, cost more than the person may make.
1000 unique listeners.
If you had 500 die hard fans who stream your music every waking minute, you get $0.
Now, I imagine they did this to prevent people from trying to game the system (create a song and have all your devices stream it all the time, or something), but it's still shitty that if you have legitimate "listens" you can get nothing.
It makes it so that I know some of my listens are just going to line Spotify's coffers. I have a number of bands I listen to who are under even 500 monthly listeners. Even if they're only getting a couple cents, I know they're at least getting something from my listens on Tidal.
No, they spun it that way by deceptively going on a rant about how many "songs get fewer than 1000 plays ever" and doing the math based on that in the "article," but that's not what the change actually was. If you read the details of the change below that, it is that they will no longer pay out at all for songs that get fewer than 1000 unique listeners per year.
You still aren't talking a ton of money, but if each of 999 listeners streamed a song once per month, the artist could be losing close to $40 per song per year.
Playbacks, not listeners. It's not a high threshold and listeners would be a weird metric in the first place. Playbacks doesn't exclude niche content consumed often by fewer people and shows overall popularity.
Yes, fire everybody. That's surely a fantastic long term plan to make that all-important line go up.
Maybe they could try not paying a fascist $200 million for his podcast. That would save some money right there.
Fuck Spotify and fuck Joe Rogan.
As much as I dislike Rogan, he's hardly a fascist. He's just an idiot that agrees with anyone speaking confidently for more than 5 seconds.
an idiot that agrees with anyone speaking confidently for more than 5 seconds.
Isn't that the bread and butter of Fascists? It is pretty much the hallmark of a Fascist movement to have a "confident speaker" to wow the masses.
Maybe they could try not paying a fascist $200 million for his podcast. That would save some money right there.
Only if his podcast has fewer subscribers than generate $200M revenue
Because of interest rates hikes, companies like Spotify have to focuses on more trivial matters like being profitable. 17% lay off seems like a lot. I wonder if they will go bankrupt?
They reported a 65m profit on the quarter before these layoffs. I don't think they're going bankrupt unless this last quarter has been a disaster for them.
Spotify's issue isn't unique. Fundamentally, given how much money the labels demand and how relatively low streaming subscription fees are, there's simply not a ton of money around. Spotify has been unprofitable for most of the past few years. The fact of the matter is that people expect to be able to listen to essentially all music for a relatively cheap price, and labels expect to get most of that money. The specifics of the company don't matter much. If Spotify dies, people will migrate to another platform, and the finances won't be meaningfully different there. Maybe someone like Apple could afford to eat the losses or is actually big enough to tell the labels to pound sand, but otherwise, this is just kinda what the situation is.
I think it's more related to rising interest rates which hasn't happened for decades now. I don't Spotify is in any real trouble tbh, it's just house cleaning and future planning given the business landscape changes.
I agree that's probably their main issue right now, and they're hardly unique there. You've seen layoffs and belt tightening everywhere as the free money faucets have dried up.
That said, I think the core business model isn't exactly challenging. Similarly to Netflix ten years ago, they're primarily serving content that they don't own, but unlike Netflix, they're probably not going to be able to pivot into content creation unless they want to actually become a proper label, and even then, they'd need big enough stars that other distribution platforms can't afford to not cooperate with them. Otherwise, they're always going to be at the mercy of the labels, though there is some balance, since the labels also need the streaming platforms to at least survive.
And this is why they focus and promote the podcasts so much. Podcasts don't have any label intermediate
Well I guess I did correct by switching to Tidal. From Apple Music. Until Tidal does the same, I guess.
Hopefully this includes the guy that changed it so there's always some Taylor Swift song instead of what I was actually listening to last when I open the app.
Sincere question: do you use a unique, secure password on your Spotify account, and are you sure that it's never been compromised? Your story sounds very similar to a case where a Spotify account was being used by someone else.
Reply All episode about it: https://gimletmedia.com/shows/reply-all/j4he7lv
No the queue will now add popular Playlists to what you were listening to when you restart the app if your previous queue was a generated one. Not sure the exact steps to cause it but it seems like if you were listening to a daily Playlist close the app, the next day the Playlist has updated and instead of pointing to the new daily it decides to point to one of the popular Playlist for your next songs in queue. It doesn't stop the song you paused on it just adds new shit to the queue after it once it loses track of where to point. Seems like they should just start shuffling your liked songs in that case but nope it points to a random pop Playlist.
You know what really abouts the flying f out of me?
Even if I start with something quite heavy like system of a down, ace of spades or whatever it always ends up after half an hour with ballads, soft rock and what have you. Elevator music.
Why. Why? Wasn't I clear ? I want metal. And lots of it. That's what i started with. Not muzak. Stay with the genre. Not jump them.
I use a complex password. I don't see a way to view logged in devices but nothing else is fishy so I'm assuming it's something some marketing idiot came up with.
Fire the payola people that make it so even if you hit shuffle, you'll only hear the same 10% of your playlist over and over again with the same artist 3 songs in a row.
They say that they can't release their randomizer algorithm to protect trade secrets. Which is exactly what a company engaging in payola would say.
I've been in tech for a while, I can't tell how much of this is due to over hiring and over paying for work during that crazy time 2 years ago. I had lots of friends bounce to hire paying jobs and a lot of folks were just trying to gobble up talent. A lot of those places doing that seemed to be having big lay offs in the years following. I think there was a lot of optimism back the about the market, and it seems like course correction and pessimistic outlooks at play.
On top of that, moneys tight right now. Saw 3 months of spotify premium dangled for 10 bucks like a week or two ago and it just seemed desperate to me. Still haven't come back tho, broke, and I feel for these employees.
This is the best summary I could come up with:
Swedish music-streaming giant Spotify has announced it is cutting 17% of its workforce, about 1,500 jobs, as the company seeks to clamp down on costs.
Spotify employs about 9,000 people, and Mr Ek said "substantial action to rightsize our costs" was needed for the company to meet its objectives.
Mr Ek said that given the recent "positive" results, the job cuts being announced "will feel surprisingly large" for many people.
He said Spotify had considered making smaller reductions during 2024 and 2025, but decided that more drastic action was needed to improve the company's finances.
Since it launched, Spotify has spent a lot of money on growing the business, and in securing exclusive content such as podcasts created by the likes of Michelle and Barack Obama as well as the Duke and Duchess of Sussex.
Commenting on podcast content, Mr Ek told the BBC in September: "The truth of the matter is some of it has worked, some of it hasn't."
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