Apple Music Competitor Spotify Lays Off Over 1,000 Employees

[CarpalMac]

That is true, but five months severance is a better deal than many who are getting laid off lately are being offered.

If they actually do all get that... (spoiler: they don't).


@CarAnalogy -- Editing as my post as it appears the details I was given were incorrect, so it may be that they are. Bad as I think their behaviour is, that is much better than I have ever seen elsewhere.

 

[Abazigal]

Apple pay more than Spotify, so I doubt it.

Apple pays more than Spotify per stream, but Spotify gets more streams (because it has more subscribers) so I am willing to wager that Spotify pays out more to artistes if you just count dollars and cents.

I actually feel that Spotify needs to jettison their free tier to improve their profitability, but that’s a move that likely won’t go down well with users who have come to rely on it.

 

[GuruZac]

I use both, and there are certain things I prefer with Spotify’s UI and algorithms, but Apple Music is definitely closing the gap.

 

[gmarm]

I hope the best for those affected and for the future of Spotify itself.

 

[nnoble]

The only reason for me not subscribing to Spotify is Deezer.
As for the layoffs, employees are made redundant all year round. it’s only ‘just before Christmas’ that makes it a headline.

 

[theluggage]

I actually feel that Spotify needs to jettison their free tier to improve their profitability, but that’s a move that likely won’t go down well with users who have come to rely on it.

…but how many of Spotify’s new subscribers come in via the free tier? Its really their defining feature - you can “share” music with anybody by linking to Spotify, without worrying whether they have a subscription - which probably helps artists get discovered too.

 

[Jeeg]

why don't they launch lossless music? I would gladly pay more.
I don't use Apple Music because Apple doesn't license it to the HiFi manufacturers and you kinda have to use an Apple device as the source. Spotify Connect is so much more convenient.

 

[Muzzakus]

What on earth all those people doing there. Elon Musk needs to write a book on how to properly run a tech op.

 

[Someyoungguy]

..and Spotify needs less Joe Rogan.

They could have layed off this one guy instead. 100 people x $100K is half a Rogan, though Joe’s contract was rumored to be 42 months. Still, I’m sure it will be renewed this year for more than the last time.

*next year

 

[return2sendai]

Short version: Thank you for all your hard work. Here’s your hat.

 

[theluggage]

Why did Spotify need almost 6,000 employees in the first place?!?

de Solla Price's law: with N employees, 50% of the output is produced by √N of the employees.
(See also "The Mythical Man Month"). So if your gut tells you that it should take under 100 people to run something like Spotify, 6000 is probably about the realistic figure.

It's not that people are lazy or unproductive, it's just that the larger the team, the more of everybody's time is taken up in communications and administration - and the solutions (and lack of a single magic solution) involve telling the C-suite things they don't want to hear.

 

[Someyoungguy]

What on earth all those people doing there. Elon Musk needs to write a book on how to properly run a tech op.

He needs to read one first.

https://www.bloomberg.com/news/arti...ce-he-paid-for-twitter?embedded-checkout=true

 

[ginkobiloba]

Great news ! Spotify ( and Daniel Ek) is a terrible, terrible company that deserves all the hate it gets from artists.
i hope the fired employees will be swiftly hired by their competitors.

 

[CarAnalogy]

Mr. Sympathetic here...I guess if you crashed your car, broke up with your partner and your dog/cat ran away all on your birthday, it's just like any other day right? "The Holidays" (Christmas, religious or not) is supposed to be a special, happy time, not one where you worry if you'll have income next month. Sheesh...

It's true. And yet holidays and birthdays are often the most stressful and disappointing times of year. Maybe because of increased expectations.

 

[CarAnalogy]

What on earth all those people doing there. Elon Musk needs to write a book on how to properly run a tech op.

Yes. Yes he does. As a warning to others.

 

[picpicmac]

For myself, Youtube Music covers almost all of my needs. Without charging me a penny. If I really wanted lossless then I'd have to go for one of the services such as from Apple or Qobuz... but I'm find with Youtube quality.

Spotify pays certain people like Rogan in order to get large numbers.

I'm not adverse to going back to the old days of buying music on physical media. Better quality sound, and the artists likely make a little bit more.

 

[Steve121178]

This fear of firing during holidays really seems to be an american thing? Too many ”lampoon” movies?

Having worked for a few American companies, it's done to keep the shareholders happy. Nothing makes a shareholder happier than knowing a mass cull of people is happening as it's the easiest and quickest way to cut costs of a business that is failing or having a major slump. It's one of those "looks really good on paper" tick box exercises.

Despite being a Swedish company, Spotify is listed on the NYSE. So has to please those investors as money is so important to Americans.

 

[WarmWinterHat]

For myself, Youtube Music covers almost all of my needs. Without charging me a penny. If I really wanted lossless then I'd have to go for one of the services such as from Apple or Qobuz... but I'm find with Youtube quality.

Spotify pays certain people like Rogan in order to get large numbers.

I'm not adverse to going back to the old days of buying music on physical media. Better quality sound, and the artists likely make a little bit more.

You don't get Youtube Music "without charging me a penny" unless you subscribe to Youtube premium, which I have zero interest in doing.

 

[Robert.Walter]

“Over the last two years, we've put significant emphasis on building Spotify into a truly great and sustainable business…”

…Now that we are there, we don’t need you anymore. You are a drag on maximizing profits. You are expendable.

If I were a subscriber to their service I would be cancelling so hard their CEO’s head would be spinning at 78 rpm.

Hey CEO Scroogeify (or is it Screwgify?) Bah Humbug to you and your corporate roadmap!

 

[cocky jeremy]

Oh, darn. Spotify falling on their faces. I know I hate to see it.

 

[DemonMF777]

Why did Spotify need almost 6,000 employees in the first place?!?

Yeah, maybe we don't have a clue, but how does an an app need 6,000 people to keep it up & running?!

 

[1129846]

Yeah, maybe we don't have a clue, but how does an an app need 6,000 people to keep it up & running?!

There is a lot more to the company than just the app. The dev team is going to only be a small part of that group.

Things like support staff grows with users fairly linearly. For X number of users you need one tech support person. For X number of tech support people you need 1 manager and so on.
Then you have data center management and dont forget you have to have people to manage advertisement and sales for that. you need people to manage content and coordinating there. Marketing people and so on. It is a lot more than just the app. Product mangers and so on. Plus you need 1 manager/Lead for every 5-10 people. Even if someone is not offically a manager someone is going to be handling that type of work and tracking everything. Then as you get larger you get HR departments which again scale with a company size.

Tech support can easily be the largest part of a company. I was at one software place that had 400ish people. over 1/2 the company was just our tech support. The entire development side was 60-70 people total. Support grew based on the number of users. Only so much we can do about that.

 

[TechnoMonk]

I’m pretty sure the way Spotify becomes profitable is simply by ending the free tier so the paying customers can stop subsidizing them. The problem is pretty evident with the note they added 23 million users but only 6 million were subscribers. So 75% of your users are taking a free ride? That’s not a recipe for success.

It works for large companies like Amazon, they can be loss leader and drive competitors out of business. They can do what ever after, Spotify is in a tough spot with competition from bigger companies Who can bleed longer. There should be more incentives, or differentiators from subscriptions to convert those free tier users.

 

[orl2222]

..and Spotify needs less Joe Rogan.

Yup! This like what happened to Sirius/XM with Howard Stern. Payed him a ton of money, serveral channels devoted to him. Because of limited satillite bandwidth, Music stations were eliminated, and the rest were cut way back on quality. AM radio sounded better. Subscribers left in mass. Now Nobody really cares about subscribing to them, and I'm an old boomer, I quit them when this happned.

 

[mdatwood]

Every tech company except maybe Apple over hired the last few years. Now that rates are going up and we're mostly returning to 'normal', those companies are correcting the over-hiring. Spotify in particular only recently barely started making a profit after years of losses so they acutely feel the rate increase.