back to article 17% of Spotify employees face the music in latest cost-cutting shuffle

Spotify has announced its third and largest round of layoffs this year, cutting 17 percent of employees despite recently posting its first profitable quarter in more than 12 months. CEO Daniel Ek made the announcement in a letter to staff today. As mentioned, Q3 2023 was Spotify's first profitable quarter in a while, with the …

  1. elsergiovolador Silver badge

    Mindset

    You have to have a certain mindset to work for a company that is ripping off artists.

    No sympathy there.

    1. sabroni Silver badge

      Re: You have to have a certain mindset to work for a company that is ripping off artists.

      The punters are culpable too. No profit for Spotify if people didn't pay their subs.

  2. Andy Non Silver badge

    What do all the staff do?

    I'm not a spotify user, is it something more than just a subscription based music player app?

    1. doublelayer Silver badge

      Re: What do all the staff do?

      Some people write the app. Some people write the software for the servers the app contacts. Some people make sure those servers don't break. Some people make sure the servers have good network connections so the users can use them. A lot of people aren't in the tech part, though, and somehow I think you're not thinking about all of those. For example, people to deal with licensing music from all the people who make it, because the way Spotify has built its business is having most music you can think of, and that requires a lot of licensing even if the terms aren't very nice to the creators. They also have a podcasting business, since that's another set of audio that people like to consume, so they have people commissioning, reviewing, and publishing podcasts if they don't count some of the people actively making them (those are probably considered external contractors, but I don't know). Then they have to make some money off this, so they have an advertising department, and since they're running an audio streaming platform, they can't do like a lot of ad-supported internet companies and just have a bunch of Google ads. They have to run that themselves. They do many of these things in lots of countries, so budget for running multiple advertising teams for the different markets and languages. I'm not surprised that the nine thousand is too many, but it's not like they could do this well with a hundred.

      1. Anonymous Coward
        Anonymous Coward

        Re: What do all the staff do?

        So that’s about 1,000-1,500 staff?? What do the rest do ??

      2. Zippy´s Sausage Factory

        Re: What do all the staff do?

        You can also blame Sony as the agreement they made in the early days specifies that nobody can gets more money per play than Sony. They can get the same, but not more. So if your track is licensed directly and you're on the top rate, it won't go up without it costing Spotify millions.

        Of course, now they're probably using that as justification for paying peanuts, despite their record profits.

  3. Anonymous Coward
    Anonymous Coward

    No obligation on artists to make their content available to Spotify, if they believe they're being ripped off.

    1. elsergiovolador Silver badge

      In the digital music industry, artists face a systemic issue that extends beyond just Spotify. While Spotify is one of the largest and most visible players, many other digital music platforms also exist, each with their own payment structures and terms. The reality is that the digital music marketplace, as a whole, tends to offer compensation that independent artists find insufficient and this space is in a desperate need of regulation.

      Or you are one of those types who could live without art?

      1. Anonymous Coward
        Anonymous Coward

        Or you are one of those types who could live without art?

        Congratulations on your pithy little ad hominem, makes you feel superior does it?

        The reality is that the digital music marketplace, as a whole, tends to offer compensation that independent artists find insufficient

        As has always been the case. Absent a large enough audience they'll have to keep themselves afloat until they hit the big time, or give up. It's not anybody's fault that independent and emerging artists don't have a viable business model.

        and this space is in a desperate need of regulation

        You think lawmakers should set a price for music so that people who aren't good enough to make it in the mass market should be subsidised so they can live from their hobby, funded by somebody else?

        1. elsergiovolador Silver badge

          makes you feel superior does it?

          Au contraire. It's fascinating that some people can live without it.

          Absent a large enough audience they'll have to keep themselves afloat until they hit the big time, or give up. It's not anybody's fault that independent and emerging artists don't have a viable business model.

          You could say it about any profession. Surgeons should be able to support themselves until they fix the patient big time. Warehouse workers should keep themselves afloat until they put their 1000th OLED TV on the shelf without breaking. It's not anybody's fault bricklayers don't have viable business model (if there was such a thing as Spotify for Bricklayers).

          As has always been the case

          Appeal to tradition. Remember that at some point one could have said that to someone saying slavery is wrong. "We always had slaves".

          You think lawmakers should set a price for music so that people who aren't good enough to make it in the mass market should be subsidised so they can live from their hobby, funded by somebody else?

          We already have laws, but institutions who are supposed to enforce them may need a nudge. Workers are entitled to a minimum wage for their time, at very least if they work at a for profit business.

          1. FIA Silver badge

            Au contraire. It's fascinating that some people can live without it.

            I don't understand? Spotify not paying what you consider 'fair' won't make musicians stop writing music, or artists stop, erm... arting?? It never has, and it never will, as generally artistic people express themselves regardless.

            You could say it about any profession.

            Yes, in general that's how it works isn't it?

            Surgeons should be able to support themselves until they fix the patient big time.

            That's how it works... yes... Often higher skilled professions will incur a much greater 'no decent income' time at the start too. That's why students work in bars or restaurants.

            Warehouse workers should keep themselves afloat until they put their 1000th OLED TV on the shelf without breaking.

            That doesn't make sense, but warehouse workers should be paid for their work, yes. That pay will keep them afloat.

            It's not anybody's fault bricklayers don't have viable business model (if there was such a thing as Spotify for Bricklayers).

            Most bricklayers lay bricks. That's been a fairly viable business model for a good while now.

            Appeal to tradition. Remember that at some point one could have said that to someone saying slavery is wrong. "We always had slaves".

            ???? And people are being forced into writing music? I'm not sure comparing a badly paid (in general) profession someone enters by choice to human trafficking and enslavement is helpful, or accurate.

            Workers are entitled to a minimum wage for their time, at very least if they work at a for profit business.

            And any musician can go and work for a 'for profit' business and get paid that minimum wage. However if you work for yourself you need to convince enough people as to the merits of your output, be that a lovely tune or a fine oak table, to pay for it.

            The problem isn't really Spotify, it's people.

            Throughout history artistic people have been exploited by business people. It's a weird symbiotic relationship that I'm not sure you can ever really fix. How many now famous painters were poor in their lifetime? There'll always be someone with a mythical pot of gold, and there'll always be someone talented but naive to fall for that.

          2. doublelayer Silver badge

            "Workers are entitled to a minimum wage for their time, at very least if they work at a for profit business."

            And independent musicians should receive that wage from ... whom exactly? I ask because I write music. Not for sale, just because I get enjoyment from it. In fact, I mostly leave the completed work on my hard drive to tinker with later, since I'm never completely satisfied with it and I wasn't going to sell it anyway. Some of it's available on the internet though. Where should I pick up my check?

            When you do things on your own, because you wanted to, you aren't automatically owed a paycheck. Sometimes, such things can prove to be quite profitable, but if they don't, the risk is yours. If I tried to sell my music and thought that Spotify was underpaying, as they almost certainly would be, then I can choose not to sign with Spotify and try to find somewhere else to put my music. If my music proves very popular, that can work out. If it doesn't, and chances are it won't, then that's on me.

            1. Dan 55 Silver badge

              You don't sign with Spotify, Spotify signs with your label. If you're Taylor Swift who got famous before streaming your label does what you say, otherwise it doesn't.

              Hardly anyone buys music any more as it's usually on Spotify, Spotify pays between $.000029 and $.0084 to the the label for streaming it, and the label pays a fraction of what they received from Spotify to artists - therein lies the problem for new artists. So there we go, another market successfully disrupted.

              1. Anonymous Coward
                Anonymous Coward

                … and Amazon Music or Apple Music pay more ???

                1. Dan 55 Silver badge

                  That new artists can't make a living out of any of them is not a point in Spotify's favour.

            2. the Jim bloke

              I get my music through Bandcamp

              According to their blurb, most of the money goes to the artist, and I can download the tracks to my personal devices at will, in various formats.

              Apparently they also do streaming, but thats looks such a stupid way to get music I have never tried it.. may have been useful when memory was scarce, but now I carry over 3000 tunes on my phone and still have plenty of space for anything else I want.

              Only drawback to Bandcamp is they dont have good access to the big labels librarys - but you can usually find a cover version of anything popular by an independant artist..

              1. Steve Graham

                Actually, Bandcamp explicitly forbids cover versions which are not licenced. Anyway, who wants Big Labels' music, apart from the musically illiterate public?

                1. the Jim bloke

                  Anyway, who wants Big Labels' music,

                  I generally dont want anything from the recent couple of decades, but older than that and they have an added nostalgic value.

                  I dont know about licensing requirements, but there are a few 'artists' whose output is entirely other peoples work.

            3. MachDiamond Silver badge

              "Where should I pick up my check?"

              Form a music publishing company and list with the major licensing agencies, BMG, ASCAP, etc. Until you chart well, you may not get a check that exceeds what it will cost in petrol to take it around to the bank for deposit. They often send paper checks just to get people to not cash them.

              The music business is a massive cess pool with sharks. And, you can guess that any shark that can live in a cesspool must be pretty nasty. Musicians are told that if they can dive in and touch the bottom, they get a big reward. Most musicians strip naked and climb the ladder to the 5m platform for a good go. No training, no wetsuit, vaccine regiments, nothing (learning about the ins and outs of the music business).

      2. Doctor Syntax Silver badge

        "Or you are one of those types who could live without art?"

        I can live indefinitely without pop but then I have a problem defining that as art.

  4. aerogems Silver badge

    Just once

    I'd love to see a CEO get up and say that they are going to be among the redundancies, and without their massively bloated salary they were able to keep 10-20 additional regular staffers employed.

  5. Doctor Syntax Silver badge

    If they can lay off this percentage of the staff without doing harm to the business it makes you wonder why they were all there in the first place. The comment about doing work around the work might be a clue. It sounds like they were all doing busy work showing each other PowerPoints of their spreadsheets which analysed stuff to no possibly useful level of detail.

    1. Lurko

      Don't forget the tradition in all large organisations is to grow and grow, then announce sizeable cutbacks based on precisely zero planning or analysis, and then two quarters later they're hiring because they cut back to much, and/or lost people with difficult to replace skills.

      In terms of what all those people are doing, it'll be the usual: 10% of all staff will be doing Powerpoint presentations that change nothing - experience tells me these people will all be staying. The others who will see cuts will be doing stuff like coding, IT architects and planners, R&D, people who do commercial agreements with IP rights holders, market research, sales and marketing, finance (accounts payable and receivable don't sort themselves out, anywhere, nor management accounting, statutory reporting, tax accounting), legal (we might hold them in low regard, still an evil necessity). HR is widely despised, but a corporate necessity too. Then there will be people tallying and reporting emissions, people doing corporate responsibility stuff, procurement teams to buy the stuff Spotify uses, facilities managers etc etc. For any sizeable corporation there's a shed-load of unglamorous but essential activities that keep the wheels turning. And many of those functions have to be done at a jurisdiction/country level.

      1. aerogems Silver badge

        I forget what show it was, but there was some radio show where they started off just trying to answer some seemingly simple question about 1D UPC barcodes. And it turned into this huge rabbit hole about how there's literally an agency in charge of doling those things out, and then the radio show decided they would put together a quick comic book to explain everything. That got them into how comic books generally have to be a certain length, and specific size, because that's how printing companies are set up to deal with it. Trying to add like one extra page would increase the costs significantly. Then trying to book an artist to actually draw the frames was a challenge. Every single seemingly simple step ended up involving all kinds of hidden complexities.

        If you think about a company like Spotify and figure all the people you know they need (programmers, a couple system admins, and so on) there is probably 2-3 support people who are needed to facilitate those people being able to do their jobs. At most companies, getting approval for a headcount can often be the product of months, even years, of fights to justify the expense with the beancounters. It's generally not like companies just start hiring people willy-nilly.

      2. Doctor Syntax Silver badge

        I think some of what you list still falls into the busy-work category and some of the payments stuff could and probably already is be automated away. Then the more of these you have, the bigger the office to put them in and the more HR and facilities stuff you have and more layers of middle management. That quotation I picked out really says it all.

    2. aerogems Silver badge

      Who says it won't do harm to the business? It just means that the staff remaining now get to do their job plus the job of 1-2 of their former colleagues... all for the same salary. Eventually those people will become bitter husks of a human or just stop giving a shit, assuming they don't leave for another job.

    3. Steve Graham

      If they can lay off this percentage of the staff...

      Have you heard of "Twitter"?

  6. Anonymous Coward
    Anonymous Coward

    What on earth are 10,000 people doing there anyway?

    1. Anonymous Coward
      Anonymous Coward

      Trying to help the company meet its performance targets. Let me offer a comparison:

      Sky has 29,000 employees serving 23m customers (or less, the 23m is "customer relationships so may be products), with revenue of about £14bn across the UK and Ireland. They're essentially a two country pay TV middleman.

      Spotify has c10,000, serving 220m+ paying customers in 184 countries with revenue of about £9bn. And they're essentially a many, many country audio streaming middleman.

      So comparing the two, seems Spotify are surprisingly lean.

      1. Sorry that handle is already taken. Silver badge

        I think it's probably fair to say that Sky produces a lot more content as a proportion of what it delivers than Spotify does?

      2. NeilPost Silver badge

        Yes, but Sky is spread over Digital TV (inc Production, broadcasting (via satellite capacity bought), broadband & home telephony (via Openreach) mobile (via Virgin Media-O2), NowTV/SkyGo, engineers for home, cloud infrastructure, technology (Sky Q) … as well as into Sky Germany/Italia and feeding into (technology know how) and feeding off (the crummy lite version of Peacock Sky customers get, yes free as part of your package) parent Comcast.

        What do you think Peacock runs on top of? At scale Sky Go/NowTV know-how built over 15 years.

        Spotify is a music streaming service, yes globally but still fairly narrow on content.

  7. Winkypop Silver badge
    Windows

    I still buy independent artist CDs

    I think it’s all my fault!

    1. NeilPost Silver badge

      Re: I still buy independent artist CDs

      Shirley independent artists work on vinyl, to listen whilst enjoying an independent craft IPA or independent small-batch gin?

    2. Doctor Syntax Silver badge

      Re: I still buy independent artist CDs

      And then there's radio. Some of what's worth listening to even survives on the Beeb.

    3. MachDiamond Silver badge

      Re: I still buy independent artist CDs

      I like having physical media myself. A cd (or album/cassette) embodies my license for that music and it can't be taken away remotely. If the label/publisher is on the outs with the company that made the CD or the shops that sell them, it's nothing to do with me. It's been too often that there's a story from some digital music site where they yank music from their customers due to a license issue and no refunds. Bugger that with a load of sand and salt in the lube. It's bad enough that seeing live performances is a nightmare with Live Nation/Ticket Master doubling the face value of tickets with fees. The only times I get to see any band/performer I like is if they play a small venue that does their own ticketing. I make sure I take the opportunity to buy some merch and get it signed. That's where musicians make money these days. A large act such as Rush was pulling down close to $250,000 per night in profit on merch. Profit mind you, not just sales. Sharon Osborne has talked about the business of music and that was one of the big profit centers according to her and she guarded it jealously.

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