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8mo ago

Spotify CEO Daniel Ek surprised by how much laying off 1,500 employees negatively affected the streaming giant’s operations

fortune.com Spotify CEO Daniel Ek surprised at negative impact of laying off 1,500 Spotify employees

Ek said Spotify employees were doing too much "work around the work" as he laid off 17% of the group's workforce in December.

When Spotify announced its largest-ever round of layoffs in December, CEO Daniel Ek hailed a new age of efficiency at the streaming giant. But four months on, it seems he and his executives weren’t prepared for how tough filling in for 1,500 axed workers would be.
The music streamer enjoyed record quarterly profits of €168 million ($179 million) in the first three months of 2024, enjoying double-digit revenue growth to €3.6 billion ($3.8 billion) in the process.
However, the company failed to hit its guidance on profitability and monthly active user growth.

Edit: Thanks to @Zerlyna@lemmy.world for the paywall-free link: https://archive.ph/wdyDS

154 comments

Next time axe the executives and keep the staff.
Most executives I've met can't read emails and just point to one of two numbers and say "higher/lower!" while dreaming of KPI's that don't improve anything and solely exist to stagnate wages
- This is what the pharma giant, Bayer is trying right now kinda. They just told everyone to manage themselves.
  
  Germans rejecting bureaucracy? What's the world coming to?
  
  They just told everyone to manage themselves.
  Welp, I think I deserve a better compensation package, Board. Also I'm remote now.
- It's that or they think they can simply replace people with AI and call it good
  
  As someone who "makes AIs" professionally (computer vision for diagnostic imaging & GANs for CAD), the typical "executive" doesn't understand how beneficial, impotent, or dangerous deep-neural-network-based AIs can be in different sets of hands.
  I'm not a pure technocracy advocate, but our "LeAdErShIp" is woefully underequipped, at every level.

It's almost like employees are more than just numbers on a spreadsheet. Who knew.
- “People are PEOPLE? That’s not what I wanna hear…”
  
  / AI removes Depeche Mode from streaming playlist /
- We refer to them as "human capital"
  
  I prefer to look at them as a renewable resource. There will always be more orphans for the orphan crushing machine.
  
  "You know; like people. That we own and can dispense with whenever needed. It's the future!
- Not this guy!

People keep trying to paint every CEO as this smart and hardworking class of people. We continue to see it isn't true.
- There are a lot of smart hardworking CEOs. But none of them ever seem to get to this level. At some line in the sand CEOs just become idiots playing chess (poorly) from their yachts.
  Good leaders that care about their company seem to universally get pushed out at IPO.
  
  Good CEOs are bad for short term profits because they're more interested in keeping their company alive longterm.
  
  Once a company is publicly traded it can easily pervert the incentives so that the goal of the CEO becomes to enrich the investors as quickly as possible even at the expense of long term benefit, because stock price and investor satisfaction become the factors contributing most to executive compensation. A CEO who doesn't care about maximizing their own compensation in favor of employee welfare or company long term success doesn't keep the support of investors for very long either.
  
  well ya, the very nature of the shareholder system demands short term profits, the rug pull has become the industry norm, dismantle the company to make your numbers seem better, inflating value, and sell before it collapses, find your next ~~victim~~ "investment opportunity" and repeat
  
  Or they often leave on their own accord. Eg Steve Wozniak
- At that level of wealth, concepts such as meritocracy (if ever it's a positive term) are meaningless; let us still tell the fairy tale that capitalism rewards the best of us and not the recommended.
- People tend to hero worship others who don't deserve to be.
- You do have to be hard working to be CEO, there's just a ton of stuff that needs to be handled around a company at all times. But they are not uniquely smarter or have better decision making skills than other people. A good CEO will understand that they don't know everything and surround themselves with experts to help them with decision making instead of thinking they know better.
  That's not to say that workers aren't necessarily equally as hard working, especially when your asshole CEO fires a ton of your coworkers and expects you to pick up the slack.
- Who's doing that? The only people doing that to the CEOs everyone else knows they're useless.

I have finally stopped using Spotify.
Now using TIDAL and absolutely loving it. It's like what Spotify used to be, loads of great recommendations, much better audio quality, a bit cheaper, and I believe the artists get a better cut.
It's too good to last, but I'm going to enjoy it while it does
- I absolutely love Tidal as well. Was a long time Spotify subscriber, but their UI/UX decisions, especially for their desktop client, finally frustrated me enough to switch. Had almost no issues moving my playlists over, have a shuffle which actually shuffles, still have daily recommendation playlists, and my favorite part -patch notes; I know what's happening and why. They actually listen to user feedback and make updates based on it.
  
  frantically taking notes — anyone not Spotify
  
  How did you migrate your playlists?
- I saw Spotify sent out an email for another fee hike yesterday. When I opened the app, it was showing me some garbage for an AI playlist generator and the email mentioned they needed more money to pay for amazing new features, the new AI system was no better than the previous system so I figured wtf do they need it for.
  After 15 years of being a paid member, I’m going to wrap it up and go back to piracy.
  
  I'm on the same track although I distribute my music there, so I wonder if unsubbing will affect that. I'm not subbed to the other platforms that have my music, so I don't see why it would.
  Because they have a huge market share, though, it's easier to tell people check me out on Spotify than Tidal/Deezer/Bandcamp or whatever because the average Joe doesn't know what those are.
- I've been using Tidal for a long time, and it has only gotten better.
  They recently upgraded all tiers to high quality (better than CD) quality for free.
  Meanwhile Spotify still doesn't have the high quality audio tier they promised a few years ago.
- I dropped Spotify during that whole Joe Rogan thing but I had been a long time subscriber. I moved to Apple Music which is super buggy and has what appears to be zero interest in playing music I actually like. From your comment, I’ll give Tidal a shot.
- Does Tidal let family members live at different addresses or do they restrict a family to one house?
  
  Tidal has a family plan, 6 logins and not a care in the world where they are
  
  I have no idea. Everyone else I know is on Spotify
- Switched to tidal as got fedup with Spotify shit app quality, constant breaking when usieng Android auto, and glitching out when playing between pc/android. Tidal is better but missing things. My wife loves alexa integration..so she sticking with Spotify. I am enjoying tidal though. It just works evey time. Its clear why it stops playinga song, and so on. I would rather miss featurs then use buggy product. Spotify is full of random featurs and crap but its buggier then ever...
  One other stark difference is the qulaity of of mixes and radio stations tidal puts together..spotify plays same stuff on loop basically, i rarely got anything good thats new and not promoted artist...with tidal i get a huge mix of artists in mymixes and radios, both new and old stuff..its been better for discovery then Spotify.
- Just took a look at their pricing. Immediately comparable with Spotify (same price for both individual and family). Looks like I'm trying a new streaming service!
  
  Don't forget there are services around that will copy your playlists from one service to another.
- Odd that it says $10.99 for individual plan on the website but $12.99 when you download the app.
  
  I expect that's due to the 30% cut taken on subscriptions purchased through the app store
  
  If that’s the argument, that’s not even the right price. It should be $15.70, because 15.70 - 30% = 10.99. They are losing money if they keep doing math wrong. Looks like they just put 30% above 10 (which isn’t 10.99 by the way) and ran with it.
  Best of luck!
  
  It's because when you buy it via the app store then the app store takes a cut
- If i wasn't getting spotify premium for free then I'd seriously look into getting Tidal.
- I have been using and will continue to use Pandora. I pay five bucks a month for no commercials it continually sends me music that I like to listen to and I have had little to no problems with it since I first signed up. While currently everyone I know who uses Spotify does nothing but complain about how their playlists keep playing them stuff they don't want or have previously disliked.

What an incredible website. Use of page you go to read their privacy policy is blocked by the popup that requires you to accept their privacy policy before continuing to use their site.
- I feel for whatever engineer exactly followed management/legal orders to create that.

Oh no, a leopard ate my face!
- A leopard are his own face
  
  The leopard pounced at a mirror and ate dirt

HAHAHA I’m so glad I was one of them customers that stopped subscribing right at that parabolic curve. Eat it you nasty Joe rogan loving Covid denying fucking dirtbags. you fucking deserve it.
- Yup I canceled my sub when they went exclusive with Joe Rogan. I'm not spending a penny to support that douche canoe.
  
  Stop being so canoe-phobic. Canoe's make for a great outdoor activity
  
  Same... not super proud of switching over to YTM but definitely better than throwing money at Joe Rogan through Spotify.
  As with video streaming services, after a couple of great years during which I practically gave up self-hosted pirated content now I find myself going back to it as the servers enshitified beyond my tolerance... YTM is my last ditch attempt
  
  Why don’t you like Joe Rogan?

Gasp - it’s almost like these jet setting CEOs just don’t know that much about their day to day operations. Maybe they should spend less time tongue fucking each other for being “captains of industry” and more time doing the actual job they are paid obscenely for. They are supposed to ensure the company is running properly, not just push up the stock price.
- Actually that’s a really good point. Apart from any glaring ethical concerns one might have about this kind of thing, it’s not a terribly good way to run a business. Man do these folk ever like finding a nice new way to shoot themselves in the foot 🤦‍♂️
  
  If you as a CEO who has been running a company, need to fire 1500 people, your resignation should follow that decision or at the very least a few of your c suite and management team need to be removed with them.
  Talk about gross mismanagement.
  I'd give a new CEO a pass on this tbh. But if you've been running the company so poorly that a sizeable chunk of your employees need to be fired youve failed at your job. You should go.

Another psychopathic CEO doesn't really understand how things work. How many times have I encountered these clueless little dictators? When you are working for one they constantly fuck up and always blame someone else.
- On the contrary, I think the CEO knows exactly what his job is: go there and make money for himself and his friends. Whatever happens to the company in the future is the future CEO's problem.
  
  Also, "line goes up" is a dick measuring contest between CEOs of different companies.

Oh, so that's why app is getting shittier.
- For real. I’ve been having issues with playlists loading correctly especially in Car mode. It made my likes unusable for a week.
  Pay your employees! I know you can afford to fix issues.

Couple things bug me about this.
He’s composing there are still support roles instead of roles exploring high impact opportunities. But does he know the value of those support roles on keeping other teams focused?
Tech is so shitty lately. Get people to build something for you with massive revenue per employee. Pre IPO? Dilute their shares for another round of investment cash. Post IPO? Just fire ‘em, declare its the year of efficiency, and maybe say it’s your fault but not accept any responsibility or pay reductions or reduced rewards.
- Enshittification in action

December 2023:
“Economic growth has slowed dramatically and capital has become more expensive. Spotify is not an exception to these realities,” Ek wrote in a letter to staff posted to the company’s website.

Today
The music streamer enjoyed record quarterly profits of €168 million ($179 million) in the first three months of 2024, enjoying double-digit revenue growth to €3.6 billion ($3.8 billion) in the process.

I am somewhat happy I never joined spotify.
Seems like a monopoly that everyone belongs too. Yet they never really had the music I was after anyways.
- what music don't they have that you're after??? i dont think i've ever NOT found something i was looking for on Spotify.
  
  A lot of live music, a lot of indie music, and in some cases a lot of surprisingly popular music.
  In the end, I never bought into any service. I am willing to donate to Soma FM for my work day music streaming, and for everything else I simply host it myself.
- Anyone know a good service I can switch to instead? (Besides fkn youtube services?)
  
  I still download MP3s
  
  I'm pretty happy with Tidal
- They actually offer an inferior platform compared to other music streaming services. You can get way more stuff on SoundCloud for a similar price, or way better audio quality on Deezer or Amazon/Apple music, for a mark up. It's honesty kindaastonishing just his popular Spotify is compared to what they offer...
- Wouldn't call them a monopoly, at least not for music as there are alternatives.

yeah maybe if this dumbass ran his own publishing house he would be making some fucking money.
Shitposting aside, publishing industries pull in literally billions a year. They're the ones pushing music to spotify. Spotify makes almost no money, ever. Artists barely make money.
Spotify, if you're reading this, god i hope not, let artists self publish.
- Spotify made almost 4 billion dollars last year. I wouldn't call that no money. I agree with everything else though.
  
  have you checked their historical profits? They've lost money on almost every year of their business operation. I don't think they've made net money since being founded. Maybe recently.

gonna just go ahead and guess the shithead didn't start carrying the pager after the layoffs.

Evidence #4564734 that these CEOs are more figure heads and actual strategist and absolutely do not deserve the multi-million dollar packages they constantly give themselves

People with no concept of what "institutional memory" means have no business running a business.

What’s Spotify?
Some kinda laundry thing?
/s
- It’s an app for finding your dog.
- Yeah it’s one of those color bleach pens you use to get coffee stains out, no source.

Oh, I wasn't aware of that.
For the last couple of years I've been "flirting" with Spotify. It would offer me 3 months of premium for the price of one, I would take it and cancel immediately so I don't forget.
Then lived the happy pirate life for six months or so, and Spotify would come in with the offer. Last time the price was higher but I said what the hell..
Now with this post I was about to uninstall, but I read some comments about services that transfer your playlists, so first things first :))
- I've just used modded Spotify clients that give me premium for free for a long while now. Not sure if iPhones have an option like this, but there is an option on both Android and Windows.
  
  That's cool, I'm on Android and PC. But I don't think I'll go that way. I want to let Spotify die after these more than red flags.
  
  Yes, but those modded clients still do not have 320 kbps streaming, I think since that is server sided. Plus, if someone wants to use 3rd party apps Spotify apps like ncspot, one needs a Premium subscription.
- i've just been using the "audio file" strategy for the last few years.
  No fuss, no problems, only my idiocy and shenanigans cause problems. It's great. Sometimes metadata is just bunk though, that's kind of annoying.
- I just use YouTube. It has pretty much all the music I want and a lot more that I don't.
  
  I use YouTube too. But I'm not satisfied with the recommendation system - at all.

Paywall free : https://archive.ph/wdyDS

That title 😂 would make a good cross post for NotTheOnion

Even if he can see it, hes not likely gonna fix it

Wow, who knew they were all people doing something, rather than suckling on your precious Wealth Creator teat?
Here's another money saving suggestion, go without fire extinguishers and alarms. They're sitting around doing nothing all day!

Oh no. Anyway,

This guy and Elon should get together and compare notes.

Not as surprised as I was to learn they had 1500 people in the first place.

I've been a spotify premium user for a long time. still pay $11/mo and it comes with Hulu for that price. i don't like all the added bullshit they've put in like the ai dj or whatever, and i don't like the "stations" but i don't like those on ANY service as they all pretty much don't play what i want them to, so i just make my own playlists and shuffle through those. don't really give a fuck that they paid Joe Rogan, and i think it's silly if you do. Like Apple doesn't do shady shit with your money too? or youtube? or tidal? come on. gtfoh with that ignorant shit.

What do 10,000 workers do at a company that's primarily focused on a music streaming app?? I guess it just adds up, but I cannot wrap my head around that many people working on mainly 1 project. Are there just a bunch of behind the scenes projectswI don't know about? Like what are they all doing 😂
Edit: I think my comment was taken as agreeing with laying off workers. I completely disagree with that! I'm genuinely just curious what they are all doing.
- It takes a village to run a global highly available service for hundreds of millions of users.
  
  WhatsApp was able to build this in a cave! With a box of scraps!
- Hey at least this guy is asking, make him the CEO

154 comments

December 2023:

Today