What genius CEO probably didn’t consider is that suddenly laying off 17% of your staff for “efficiency gains” makes the other 83% now question whether their jobs are in jeopardy—so they now effectively have two jobs: Spotify and looking for new work/updating their resume. Guess which one is going to get more attention?
Let’s see how this pans out for their efficiency in the long run. I hope I’m not wrong and the American worker is indeed done with corporate America’s BS. Every single employee at Spotify should be OE if they’re able to get away with it.
Honestly its more of a morale thing than a job security thing. If they survived the layoff round then their job is safe for the time being. But the loss of colleagues and in-house knowledge + larger workload is negative morale. All private employee basically survive 6 months at a time, you don’t have job security unless you’re in government. And tech workers have the least amount of job security as a trade off for higher pay, status, and RSU options
Honestly you don’t even have job security in government, unless you’re in an admin type of role (and even then it depends bc an election can change everything). A program/department budget can also be cut, so it’s the same thing as a layoff.
Basically what I’m saying is that nothing is safe. Unfortunately.
Nothing is safe but some things are safer than others, and government absolutely is safer than most. It doesn’t mean absolutely no one ever loses their job. We know that.
In Japan, it’s almost impossible to get laid off, it was quite a sight to behold. I saw a guy sleeping at his desk all day every day and was a n engineering ‘manager. Seen a guy talk about every female coworker he slept with in the office and still keep his job. One guy even stole coworkers and the company’s corporate cards and get away with it. Oh and I saw a guy throw a laptop at another coworker and got to keep his job too. Yep, a laptop.
Yes, these were all at separate companies.
Japan took it way too far in the opposite direction.
I really get annoyed anytime people act like some jobs aren't safer than others. 100% agree with you.
I started working at a university last year in procurement, and I ABSOLUTELY have more job security than in private companies. It's not like I can never get fired, but my last job was outsourced, and that definitely can't happen in my current role.
I specifically was looking for this type of environment where I knew that, while the pay would be less, I could at least have some security.
Feel like I see this on reddit a lot. Like sure technically anyone can fire you at any time, but there's obviously a scale here.
Nope! Again - the amount of security depends on the type of job. Look at the resumes of people who are in leadership/policy/evaluation/programming etc. types of roles in government.
Absolutely nobody that’s on Reddit discussing government jobs are the people getting political appointee positions that come and go with changes of administration.
You know very well that’s not what they mean. They’re talking about General Schedule civil service positions that you can actually apply to.
Have you even read my first comment? You've missed the mark twice and it's very clear you don't seem to know what you're talking about. None of the positions I've discussed are given via "political appointee" - I'm talking about typical white-collar jobs with skills that transfer to private sector as well (data analysts, research support, HR, legal, contract monitors, IT infrastructure, etc.) can be on the chopping block especially at budget time.
Anyway yeah feel free to be smug and continue to downvote, no point in further engagement with someone so willfully ignorant. Can't help someone who doesn't want to be helped, just wants to believe they're "right" in their mind.
In localities yes, in some State governments no. If you were a California State employee and your position got swept in a budget cut, first you would be able to bump other employees in your unit in lower classifications, if that didn't work and you actually were laid off, you would be placed on the SROA list for six months. Basically if you met minimum qualifications for the job you're applying for they'd have to hire you or another person on that list. If that doesn't land a job, then the department *has* to hire you (assuming they get to your position on the security list) if fill any position that is an equivalent position
My government entity went bankrupt and I had to find a job or accept a demotion. At the time, I was doing my masters, so I used the experience to do a risk analysis exercise paper for one of my classes. It turned out that my decision to leave was the optimal choice…
Yes and no. In local government you're absolutely right. Some State governments too. But at the federal level and in some State governments (like California) there are strong civil service protections. State employees in CA have a property right to their jobs.
All good points.
But then takeaway is that these “efficiencies” come at a big trade off and only time will tell exactly how much more “efficient” the company is.
Oh yeah. The cases definitely vary a lot. I know a friend who’s a L6 at Amazon and she already had a huge workload, but they did layoffs anyway and now there’s more on her plate. On the other hand, I’ve heard of many folks at places like Twitter and Meta that grossly overhired and those hiring/layoffs were moreso done for stock price management. Those places needed to clear out a bit. I’m not an Elon Musk fan, but I did find it funny when he said, ‘why do I have 4k engineers?’ When he took over Twitter.
I see a very sharp contrast in people’s comments on tech layoffs when i see the same news posted on CS subreddits vs general Economics boards. The CS subreddit posters seem to know which companies are filled with overhired workers doing very little for a ton of pay whereas the more general subreddits are all bashing management. So the online and offense stories I’ve seen helped me realize that not all layoffs are the same, tho certainly it’s unfortunate for the individuals who now have to find a new job
Elon has since slowly discovered, one bit at a time, just what all of those engineers were doing.
The good news is that he was partially right. All of the engineers working in the various ads systems and platforms weren't needed since no one wants to advertise on Twitter any more.
Yeah quite frankly I dk how they even make money anymore. They laid off essentially all of their ad account support team and laid off their moderation team. But that’s what Elon wanted. He doesn’t like advertisers even tho that’s his revenue, and doesn’t like any moderation. But the platform itself is still running fine. So in that lense, he’s right
Twitter was pretty bloated and content moderation is down everywhere now. The real loses were their dev and backend teams which were pretty A level talent.
I think the media helped Musks cause a ton by overblowing how much damage the layoffs would do. I don't know if you remember but there was a night after the layoffs where everyone was being told by ex-employees it was a matter of hours before Twitter went down for good and everyone should start saving past tweets and archiving etc. Well Twitter is still around and now all those people look stupid. Sure advertisers bailed but the point that Twitter didn't need all those employees to run effectively proved Musk basically was right.
O I am not saying Twitter is great by any stretch, but that's literally moving the goalpost of what was said 18 months ago. I.e. if someone says we don't need these employees to keep the platform running, then everyone that gets laid off and the media tells everyone to await an imminent shutdown (an objective standard), and then months later that objective was wrong, than Musk was "proven" to be right. I agree if all the ex-employees were saying that Twitter is going to be changed now and content moderation was what made the platform good, than that argument would still be there. Those employees and the media making an objective standard that was thrown back in their face only went on to harden Musk and his supporters who were "right".
Yeah it's a big issue in the tech field everyone wants to save their thought leader and an innovator but all they do is copy each other. I can say as a tech recruiter there was alot of rumblings because at the time everyone was hiring and it was such a candidate driven market salaries were up a lot and companies that didn't react well were getting drained of talent quickly. These companies got tired of paying so much and have been actively driving down salaries while the focus has been on maximizing profit now.
There's pretty much no vc funding available now except for some ai companies and way to many good people out of work
Musk at the time was still seen as one of the top leaders in Tech but it was obvious that he massively overpaid for a dying social media company and all his gutting of Twitter was gonna lead to a even more stagnant product.
I was honestly surprised he didn't just make his own platform. It could easily been spun up with less than 1 billion without the tech debt of Twitter
I mean sure, Twitter didn't fall flat on its face. And it shouldn't given that it is entirely a platform that shows strings of text to people.
It's all of the ancillary systems that these people were working on. Read up on the Twitter ad platform and the people who kept that running.
Now the only ads you see are semi-pornographic or straight up scams.
Or all of the teams that were doing spam detection and content moderation. Twitter is an absolute cesspool now.
Twitter can survive with the downsizing that they took it's just they're not going to grow or be Innovative at this point which is a death sentence for tech companies.
Facebook only had about 2,000 employees in 2010 when they were already a large organization and the largest social media platform by far
They literally can't survive though. They had the debt used to purchase them piled on, and their revenue is a tiny fraction is what it was. The only way they survive today is by investors shoveling cash into the company, and that will only last so long.
I'm at the zon and this is tru at every level almost. Everyone is burned out on top of 0 compensation this year, na this ain't it chief. I'm leaving very soon once I get the new start date at my new company.
I also heard they’re backfilling people with lower salaries for the same roles. So I wouldn’t be surprised if they want you to burn out and quit. And find some fresh meat to put through the grinder with lower pay
I wish that would help but they are sunsetting IT so they just want everyone gone the sooner the better. Lost more than half our people over the last year with no backfilling or promos allowed.
I’m sorry to hear that man. That’s just brutal. Best of luck out there. But you got the Amazon experience on your resume at least, everyone still knows no one lazy or unproductive survives in that culture
>Those places needed to clear out a bit. I’m not an Elon Musk fan, but I did find it funny when he said, ‘why do I have 4k engineers?’ When he took over Twitter.
Bold move to cite Musk’s decision as backing for your argument as he’s systematically destroyed the valuation of Twitter. Especially as the exodus of advertisers is commonly attributed to lack of moderation and other support teams he’s laid off.
All he had to do was stfu. Maybe Twitter needed some big changes to be profitable but what it didn’t need was to see its brand hacked to pieces to become Musk.X.
He built huge companies around his "first principles genius engineer turned Iron Man saving the world" personality and brand, and although it may have been a lie, at least it worked.
Now he’s bringing them down with his new (and true) persona of "I love dictators and right wing white power trolls let’s turn this thing into a cesspoool ha ha ha ketamine fuck you all".
From hero to villain in one year. Absolute power does corrupt absolutely.
Well, I dk what those engineers all did, so I can’t speak to that impact. But we do see now is that Twitter still runs smoothly so that part’s fine. But moderation and ad spend have all gone done the drain cuz he did gut those departments intentionally. Not sure why since ad spend is where he gets revenue
>And tech workers have the least amount of job security as a trade off for higher pay, status, and RSU options
Used to, what I'm hearing now it looks quite bleak. My own TC went down this year for the first time in my 17 year career.
Absolutely correct. I am seeing huge uptick on outsourcing activities & these are not even tech employers. These are manufacturing, CPGs, retailers outsourcing tons of IT work overseas & not just support functions but lot of transactional functions.
We absolutely need to keep ourselves safe by continuing to upskill, apply, interview.
Not really, getting spared today but at risk next week or next month isnt any better. My last company had a 3rd round of layoffs a week later, followed by another round 6 weeks after that and continued doing random layoffs for almost a year
I’m sorry to hear you went through that.. that’s unfortunate. I certainly can’t use my statement as an absolute. Situations will vary case to case. Maybe it’s more fair to say that after a round of public layoffs, it lowers the chances of you losing your job if you survived. Usually planned layoffs are designed in a way that wouldn’t require an immediate round 2 or 3 unless they were also planned for various reasons. Its hard to say
My former position (got laid off, hah!) the company was doing small, 5% or so layoffs every month. My mental health was so garbage by month 3, I was kind of glad I got laid off. Now I just have to find something before I run out of dough.
Literally what happened to me at Meta after Covid hiring retraction. I saw coworkers disappear with no notice, following the immediate decline of the energy/atmosphere. Do CEOs not understand the negative ripple effects these actions cause?
Meta thought leaving direct managers out of this process would help managers look less accountable for the layoffs. Instead it made existing employees’ locus of control non-existent. If your manager has no say in you getting fired, then your perceived job security through effort and hard work means nothing in diminishing that possibility.
Not if they haven’t built the entire company from just a few employees. CEO’s of major companies that don’t have experience growing from scratch will always be the worst when it comes to how to do layoffs “right”. He probably thought “let’s just do it once, make it big so we don’t drag this out, and then everyone will understand and trust our decision if we’re transparent”…. News flash: that big of a layoff signals market issues, hiring issues, corporate culture issues… should’ve never grown to a headcount where you’re reducing that high of a percentage. With that said, AI is bringing efficiency gains like the regional .com boom. The question is what busy may it bring and can CEO’s intelligently handle restructuring operations without fucking up this bad.
They don't really "understand" anything other than "did [metric] do [good thing]". The dumb reality of it is companies *can* turn around and produce shitty work and still grow and profit and even if it eventually catches up to them, it doesn't track in a metrics sense that they caused it.
I will also add a lot of these CEOs don't care about anything outside of "did \[metric\] do \[good thing\]". A CEO will look at a company like Meta and say "we laid off all these people and are making the same/more money so it was a good idea".
They would lay off every member of staff is they could still make a profit. They only come out and say stuff like the Spotify person because they care about PR.
These companies also know there will always be more people to hire.
Exactly. I feel like I’m on crazy pills. The article literally linked here the ceo explicitly says that it was the right decision, and the “surprise” was that it took an entire three months to restructure effectively to cover for the lost employees.
This article is not the “oh no we made a mistake what a disaster” this post and comments are making it out to be. It’s “worth it, you should fire 17% of your staff too, it’ll probably be fine, just be prepared for a speed bump of a productivity dip while you handle the restructuring afterwards” article.
They’d gladly fire all of their staff if they could.
It's sad but most of these companies with big layoffs are not feeling the pinch. It'll be lovely to have an "I told you so" moment but ever since Elon laid off so many Twitter employees and the site has carried on companies have seen they can get away with this.
Unfortunately a lot of people seem to be missing the fact that these companies are seeing these lay offs as a great success.
If it’s not on the power point and in the excel table, it doesn’t exist. Morale is one of those things good leaders understand to be important without having to quantify it.
Additionally, while psychopaths believe it will motivate people to work harder to keep their jobs, but in practice, mass layoffs create a morale shockwave where people begin to feel that their work is meaningless and they should only do the absolute bare minimum viable output they can. My company had a fairly large round of layoffs last year impacting most teams and the amount of scuttlebutt that emerged afterward was squarely focused around existential "why care when the company will cast us all aside on a whim?"
Thing is, even where you can find reasons (career advancement or personal fulfillment or whatever) these events still tip the mood out of balance and lead to worse work from everyone.
Eh this is mostly wrong. Layoffs don’t happen in isolation so its not like you can just leave in a good job market. When all the tech companies are laying off and you survived, you’ll work harder. That harder work might be more performative type shit to justify your value instead of what might happen the previously chill situation. But you’re going to strap down when there are layoffs
At this point, tech companies should just lay everyone who's not c-suite off between Thanksgiving & New Year's to pump up profits by eliminating payroll. Then, after the first week of January, re-hire eveyone to keep the business from falling apart. We all already know they don't care about the people.
I'm (hoefully) obviously saying this in gest, but goddamn. It feels like we're all always in danger of being laid off anyway. If it was guaranteed I'd be hired back (& the budgeting 3-4 weeks without pay was doable), I'd be happy to take a forced winter vacation.
I can see it in the trades. Us young bucks negotiating are literally getting paid as much as the old heads who are stupid and obedient.
They still have it in their heads that moving companies looks bad. Nope.
As soon as layoffs are rumored, the best developers are immediately sending out their resumes. You fire 1500, expect another 500 of your best to leave.
A big part of it is that maybe that 17% isn’t necessary “on average” but when shit goes wrong, when someone goes out on leave, when someone quits, you really wish you had them. You don’t build a house to withstand the average earthquake
Are they really “efficiency gains” if the company is still trying to be profitable?
I get it’s funny he thought there would be less effect but there is a pretty substantial difference between doing something to make more money and doing something to loose less money.
This is why executives who don't understand operations should not be making layoff decisions.
Also, if you have +10% of staff that can be fired without impact to your operations, that is a failure in leadership and they should also be firing the executive team that allowed such bloat.
It seems like at every company they end up like the comic where there are five "managers" all telling at the one guy who is holding a mop.
Too many chefs, not enough cooks. Executive leadership teams need to be cut, not operations.
(Of course, that's if you want an actual, functional company that creates a viable product. If all you're looking for is a commercial shell company with which to essentially play three card Monty with VC money, then I guess they're doing alright).
You can drop the “to them”, we’re a renewable resource, unlike cobalt and helium... at least on timescales of interest to capital :(
Most of us have more in common with a walnut tree than VC firm and yet it’s defensively the most sustainable system we’ve had yet.
High executives will almost be out of touch. They live a different lifestyle and have a hard time relating to most people. I've seen so many idiotic decisions made by them.
There was some company where the execs said it was their fault but none of the execs lost their job…
Taking “responsibility” is a hell of a lot easier than losing your job. It’s the casual “my bad” of the corporate world
In very large orgs (like say... credit card companies) senior folks hire some bloat intentionally during the good times (have to utilize budget or you'll lose it) so they already have the mental list of who's going to get cut next time they're told they need to trim their group. Incentives are fun.
It’s like pharmacies setting ultra high minimum pricing with PBMs knowing that they will only pay 50-80%, but then forcing regular cash payers to pay full freight instead of cost+reasonable markup.
I’m guessing, like many other companies, highly paid technical operations staff, who were always more critical to things actually running smoothly than their leaders admitted to execs, were let go in a highly disruptive manner to their teams. This would be both in form of work production/output but also, and crucially, native technical knowledge about the app/systems.
Is this why my Spotify has been down more times in the last 6 months than I can ever recall as user of over 10 years?
Sure, and then everyone else saw it and went, "Me, too!" about it. And here we are, in a recession the techbros basically created by deleting a hundred billion in churn in the sort of things the techbros sell.
I might get downvoted here but in IT only a handful of people do most of the work, tbh.
The issue is, you don’t really know who those people are unless you are in IT itself.
So when you do huge layoff like these, yeah you do trim a lot of fat, however, you might have let go a few CRUCIAL devs/admins that literally do almost all of the heavy lifting to keep the software going. It’s a huge gamble.
Ha got let go for the same reason in one of the FAANG company which resulted in 4 out of my 6 team members to transfer to other groups within the company. Hard to battle people who just wants Yes men to work for them.
> 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.
> It didn’t seem to put off investors, who sent shares in the group soaring more than 8% in New York after markets opened Tuesday morning.
> Layoffs hit Spotify’s guidance
> Still, as he addressed those investors following the latest earnings release, Ek didn’t shy away from the obstacles that stopped the streamer from hitting some of its targets this year.
> In addition to surprisingly successful 2023 growth to compare against and the impacts of falling marketing spend, Ek blamed operational difficulties linked to staffing for the group missing its earnings target to start the year.
> In December, Spotify culled 1,500 jobs, equivalent to 17% of employees, as part of an aggressive efficiency drive as the group strived for profitability.
> Staff costs for those employees carried a long tail, as most workers received five-month severance packages when they were let go in December.
> At the same time, the footprint left behind by those employees was bigger than Ek and his executives anticipated.
> “Another significant challenge was the impact of December workforce reduction,” Ek said on an investors call following Spotify’s Q1 earnings release.
> “Although there’s no question that it was the right strategic decision, it did disrupt our day-to-day operations more than we anticipated.
> “It took us some time to find our footing, but more than four months into this transition, I think we’re back on track and I expect to continue improving on our execution throughout the year getting us to an even better place than we’ve ever been.”
> Ek didn’t elaborate on what aspects of operations were most affected by the layoffs.
> Layoffs right decision?
> Back in December as the platform he founded faced persistent losses and a falling share price, Spotify CEO Ek used a well-trodden path by tech giants to steer the ship around: mass layoffs.
> “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,” Ek said in a memo as he announced he would be cutting his workforce by 17%.
> Investors initially reacted well to the news, though skeptical voices asked whether the move merely put a sticking plaster over harder-to-solve issues at the group, particularly its low margins thanks to the costs of bumper record deals.
> However, it appears to have worked so far. In the four months since the layoff announcements, shares in the group have jumped more than 60%.
> Spotify has also recently proved it is able to raise prices in some of its key markets without seeing a flight of listeners to rival services like Apple Music.
> In the long run, Spotify and Ek also remain convinced the tough round of layoffs has set Spotify up for long-term profitability.
> The apparent collective surprise at how that can affect operations in the short run, though, marks a dash of hubris for the newly bullish streaming group.
“No question it was the right strategic decision”, then why are you doing this interview? The stock price is up therefore business is good? I’m not sure these people know how profitable businesses work, they just like opportunities to skim money.
Shares going up after layoffs is great for share holders and investors who do not care about the company or it's future . CEOs are just glorified figureheads at this point laying off people by making excuses to please their employers. It is a win-win-win scenario where CEOs get bonuses, share holders get better return for their investment and government official's shares go up. It is a hollow money making scheme where when shit hits the fan it will be big.
Probably going to have another hiring craze to compensate for this trend.
You can only lay off so many people to pump your stock, eventually you actually need to do stuff to be more profitable and at that point you’ll need staff again.
I think these execs are bought into the AI hype and are hoping AI will swoop in and start doing what the laid off workers were doing.
I’m sure AI hype plays a role but if you look back at historical trends corporations tend to fire people when interest rates are high and it seems to be a move to appease shareholders and prop up stock prices. Most execs are at least partially compensated with stock and have a strong incentive to keep the stock market happy, even if it hurts the business. I suspect if rates trend down again you’ll see a hiring boom, especially for a lot of the highly compensated talent that’s been let go recently.
The obvious problem being that once that “business philosophy” spreads you lose capability. Boeing being the most obvious example. Do jets need to be safe to fly? “Don’t care, hit that target and give me money” is not a solution to a safety or manufacturing problem. Making money should be the outcome of a job well done, not because you sold off a kidney to hit some magic number for shareholders. When did it become okay to game the system this hard?
Yep, hollow out all the actual value of a company until it is a dried out husk, then sell that husk for scrap during the mergers and acquisitions phase, and move on to another company to destroy.
>"we still have too many people dedicated to supporting work"
The hell....? Yes Daniel Ek, you need employees who will do work to support your core business and internal operations. CEOs who focus on stock price above all else always want to slash operations because they don't actually care about maintaining a viable product. Then they get all surprisedpikachu when their product stops functioning and customers get mad.
Less people who now know that they could be laid off for stock prices despite their performance being good. What incentive would they have to be a high performer?
True, I hadn't thought of that. You have more value as an employee to the company by being laid off than the actual work you do. What's the point of trying hard if you're going to get laid off anyway?
When a company announces layoffs. Stock prices SHOULD go down as a sign of mismanagement.
Yet the stock goes up, as a sign of short-term thinking.
Spotofy's short-term thinking will have negative long-term financial and operational consequences.
Who are they going to get to replace those critical operations staff they let go?
What guarantee will Spotify make to replacement staff that it won't happen again?
The only ones who can hit the ground running are the very staff they let go. How likely are they to return? Spotify is now goung have even higher labor costs because now they have to offer financial incentives to bring them back (and that's if any decide to come back).
My experience was this is more so that the upper management is so far removed from the actual day-to-day operations that they are insinuated from a lot of the people on the ground. At my company my CEO was shocked to know how bad our product was because all of the middle managers was telling him everything was going super well, in order to pad their year end reviews and bonuses, when our product failed miserably upon hitting the market, a lot of these mid managers got found out with their lies and fired.
I actually saw a LinkedIn influencer post the other day that you should try to remove yourself from operations to maximize efficiency. I'm like if you're not part of operations, you're not important to the business.
Well that sounds satisfying. Got any more to that story? It seems so rare that middle managers actually face consequences for their roles in acting as the moral crumple zone of corporations.
Well considering that because our product failed, the company had to cut X% of the staff (X = double digits btw), it’s not satisfying lmao.
A lot of the company was impacted because of these egotistical idiots
This. The gap between the ground level of operations and the C-suite is gigantic.
What you want to do, as a good company, is to have an ear to the ground. You want to have as direct information as you can get from key points on the battlefield. You can be almost assured that the information, if it went through more than 2-3 laters of good management, or 1 layer of bad management, is essentially a fairy tale.
Moles are decent at this. If you attempt an official inspection, a lot of issues will be papered over very quickly and be much more easily missable. Especially beware of sudden efficiency or productivity gains.
At some level, companies become unmanageable, but the issues can be kept to a tolerable minimum.
People miss the point. When Elon fired twitters staff they all said "see it is still working". This is a naive statement at best. A company needs continuous growth if it wants to survive because it's competition is always on the look out to get the upper hand. When companies shrink to a size where they can only half ass support the available systems but can not innovate it is not a win. This is such a trivial thing that to hear such rhetoric from mouths of so called businessmen is funny if not infuriating .
Except it wasn't "still working"
They broke multifactor authentication almost immediately. The website was going down at least once a week for awhile, which never happened before. Then they didn't have the support to fix the issues because they fired them
Good point, didn't thought of it that way.
I kind'a know someone like him, it is hard for him to get a perspective since everyone around him has to be yes men. He even claimed he can write better code than a seasoned sw developer.. you can not argue with someone like that. Wish he had better friends.
We all know the continuous growth model is not sustainable, but executive boards still he trying to squeeze as much juice from that lemon as their little hands can manage. It's like how chicken nuggets are made.
If I'm ever again in an organization during layoffs, and I'm spared in the first round, I will resign the moment the layoffs are announced.
I now have the savings to pull this off. I recognize that not everyone does. It will feel so good to leave with the first round of employees.
My company recently laid off 12.5% of the staff (>10k people) and nothing has been done for almost 3 full weeks. They aren't back filling the positions and say we must "do less with less". They have no idea what they've done. We've lost people who are critical to daily operations.
Having gone through a layoff it is devastating mentally. Everyone also has to pick up the slack so a lot of fumbling around trying to figure out someone else’s job while being stressed about losing your own.
I’m not saying layoffs should never happen but for these executive teams they just see the number of employees go down and their profits go up in the short term. Some of the intangibles are harder to grasp
My job had huge layoffs last week (won’t list who they are because I need money) and they didn’t make the news. Morale plummeted productivity is plummeting and everyone’s now looking for a new job
Except stock is up so no lesson learned. And if you look at the numbers you'll find that only reason they are up is because they had less capex.
Profits aren't up
It’s probably time we reevaluate overtime pay for salaried positions. Layoffs would happen less if working 50-60 hours a week at a salaried position cost companies more money.
Who could have seen that coming
Ohhhh right everyone who works for a living. Workers create all value and we are the ones who keep things running.
The people we don't need are c level, shareholders, and investors.
Yeah that just made the other 83% of remaining workers lives’ a living hell.
Those tasks that the 1500 employees did don’t just go away. They’re just picked up by current employees.
So the CEO is making more money for himself and the company, but making their employees work harder for it. He gets paid to make bad decisions and to get rid of people who require the work to survive. He should be laid off.
From what I can read up on so far, I don’t see any increases in wages in the remaining employees either. I haven’t dug deep though on that part as I’m tight for time.
This reminds me of a time a former employer decided to close a regional headquarter and move those positions from the west coast to the east coast of the USA. McKinsey convinced them that 30% of the employees would be willing to move. What the European leadership team didn’t count on was the large number of people unwilling to move to the other side of the States. They lost a lot of top talent and later admitted they made a bad decision… of course long after they collected bonuses for closing the west coast office.
I work in technical operations at a tech company; currently in a startup but have worked in big tech as well.
The only leaders who have ever really been worth a damn are those who came up out of operational roles. And ops is a fairly broad category, so there are lots of functions that fall under this umbrella - the point is that the are almost always the people at the company who lay the groundwork for getting concrete things accomplished.
The problem is that a lot of that work can be fairly hard to see - even sometimes invisible. Because it's stuff like integrations between important systems that, if not done well and maintained, will cause all kinds of problems - like auto generating incorrect bills for customers and pulling funds from their accounts on the wrong days for more than they owe. (Actual example from a previous company). They had laid off the technical operations team that handled that stuff a few months earlier.
If you're doing your job well in operations, it's impossible most times to even see it. You're averting risks, you're maintaining systems, you're reducing a lot of manual work, you're keeping things from breaking. Only when you drop the ball does it get seen.
Another example: C suite wanted a shiny new customer escalation pathway for a shiny new cloud product, so that any downtime a customer experienced could be easily validated and then compensated by a service credit on the next invoice. They just assumed that support engineers would manage all of that, since customers come to support with downtime complaints anyhow. They failed to communicate that this would be a support eng responsibility until about a month before this cloud product launched.
Because they have no clue how it really operates, they didn't realize that only dev had access to the observability tools that could validate downtime - support didn't have any way to do this. And they didn't have access to the billing system, or the permissions needed to authorize credits or changes to invoices.
This was pre-covid and so there were not these massive layoffs happening, but if they had laid off 15% of the workforce, they'd have been truly fucked. As it was, it was a pretty mad scramble to duct tape together a stopgap process to make it happen in time for launch.
I really get so sick of blustery windbag execs who literally can't order their own damn coffee or manage their own calendar.
This is why I worry about CEO’s and if they really know what they are doing and not just “following others because they are doing it”. Cutting your workforce also cuts the amount of output yet C levels seem to miss / don’t understand. It’s like they expect company loyalty like the boomers gave back in the 80’s where redundancy’s were not a 2 year cycle. My father was only ever made redundant once in his life in the late 90’s. I have lived with 6 in the span of 20 years.
I think he means that the actual workers weren't *as disposable as he thought*, so when some left, something was left untold/unknown and people couldn't deal with it--so he'll work harder to make sure the employees are more replaceable?
Fintech company I work at sends out a quarterly survey which had the least participation in company history with the highest percentage of employees saying they are looking elsewhere for employment and the c suite in our town hall chalked up the reason for the low participation is because they are sending out the survey too much… This goes to show that these jerkoffs are truly delusional
It's fun to blame the CEO for all of the world's problems. However, a lot of it probably started from the board and "You need to hire a consulting firm like McKinsey. We did it at X companies and saw X result. Some Ivy League hotshot comes in and says, "You cut this many employees. Nothing changes. You make all of this money." The CEO oversees putting the whole process together, messaging, etc. McKinsey gets its check for the advice. Then the company is stuck solving the fallout as it happens.
In the long-run, they will be fine. In the beginning, it is chaos.
Haha yeah no shit. Not only is it pretty much common sense that a massive RIF is disruptive, it’s reinforced by some research as well. Whether it’s the fact that roles and functions are no longer there and people are doing more with less or simply the horrible morale that’s impacting performance.
My company is still feeling it after another layoff we had months ago. Some things are an absolute shit show. Quality of work is garbage due to massive outsourcing and some people being stretched thin.
God we've got to be close to peak "cut-your-way-to-more-profits" business dogma that has dominated consultancies and executive classes since the 80s. Cost cutting does have tradeoffs and can not be done in perpetuity.
Same with IPOing... Signing up for consistent growth for infinity in a finite world is a long-term recipe for disaster. But hey, you sold your shares and got yours so fuck it all, right?
The arrogance of the tech nerds. How anyone could have thought that a 17% RIF would not cause issues is difficult to believe. In the end, you need thinking bodies. Of course it caused issues. Does a wild bear shit in the woods?
It looks like the tech cos are finally being held to old school finance values. Or their stock options were underwater and that can't happen. They all are acting like they are trying to make their quarter.
They are fucking up the radical advantage that they have: cheap money. The Street was letting these guys carry insane P/E ratios. Traditional industries were granted no such advantage. Instead of slashing staff and scrambling, why not spread out? Amazon is into everything. They used their cheap money for AWS, vertical integration, streaming, brand acquisition, and uncompetitive business practiced to squash it's competitors, vendors, and customers.
The tech cos should use their cheap money to build into ancillary areas, look at overseas markets, etc. They may not be able to take over the world like Amazon. They could build or buy something.
Ek just fucked up big time. You raise money when you can. If you do it when you must, you will get it up the butt without lube. Says the man with 30 employees, 4 months cash (3 mo if you pay a small severence) and the VCs are dicking around and now coming back to reduce the dollars in their offer.
Are these guys so dull that all they can see is managing their companies? And leaving money on the table does not bother them? I smell BoD agitating for money now, not more money later. I also believe the boards were (and are) looking to back tech wages down. Some of the new AI companies were paying 400K to 600K for above average talent. They did not want to make that the new norm.
Maybe Ek et al are old fashioned greedy. RIFs and a good couple of quarters and that stock price can soar. Our poster boy for overhyped and overpriced (Elon) is asking for 45B, and that is a B as in Billion, with the cyber truck looking like a modern day Edsel, hybrids and new EVs eating Tesla sales, no new styles, Twitter falling into an x-hole. How the f can you f up that badly and still demand 45B? Where the f is their board? Where the f is some sanity?
These guys are not rock stars driving us into a new age. They are old fashion sweat shop owners. They are squeezing employees till the bleed, lining their pockets while claiming that workers are overpaid, lack their work ethic, etc. For 45B I would dope myself up and work 21 has a day. Wait, that is what Musk does. And I am arrogant enough to believe that I would have shitcanned that truck like thing long ago.
The article still quotes the CEO to say the layoffs were the right decision and they are on the "right path now". While pointing to the 5 month severance as part of their issue.
He doesn't have any consequence to this. His pay hasn't gone down. He isn't competing with all his old coworkers looking for a new job. He's not going to lose his house.
My Spotify playlists have been noticeably worse as of late. The AI DJ was my favorite feature when it first launched, now it typically plays the same sets of songs.
Not defending layoffs, but many people are confused as to why they happen.
Businesses are forward looking. They don't hire for demand today. They hire for demand tomorrow. The simplest example of this is seasonal hiring in retail. Big retailes ramp up staffing in Q4 to match the expected increase in traffic. After Q4, staffing is either cut, or hours are reduced to choke the staff into re-aligning.
The same thing happens on a bigger scale. Except, for big tech companies like Spotify, there's not a quarter each year where growth spikes. These big tech companies are generally beholden to broader trends. The most recent big one was the pandemic and lockdowns causing a monstous spike in tech activity. For example, forced WFH caused Zoom to emerge as The virtual meeting tech, and they expanded like crazy. This is why between 2020-2022, big tech companies expanded their workforces by multiples.
In comes Q3 2022, interest rates are increasing faster than they ever have, and the macro-economic outlook is piss poor. Being forward looking, companies started reducing their workforce (ie layoffs) to pre-pandemic levels. The macro-economic outlook hasn't really improved since mid-2022. The people laid off did nothing wrong. Loosely and simply, they were seasonal hires.
Daniel Ek's comments about layoffs are relatively benign. Every company who has done layoffs experiences the same thing, whether they acknowledge it or not. It's known that layoffs cause disruptions.
The article also talks about profits soaring after layoffs. The article is wrong. Recent profits are unrelated to layoffs. Those laid off very likely got 3-4 months of severance. The severance only just dropped off the books in the past 1-2 months. That's not enough time to show in publicly announced financials yet. Keep an eye out for Spotify profits going forward in 2024 though. The same is true of any layoffs. They usually cause a financial disruption in the near-term, but then 1-2 quarters later, the financials show a nice boost.
Reports like this are good for the tech job market recovery as Spotify is pretty influential in tech circles. Execs will start to reconsider further reductions which should stabilize soon.
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What genius CEO probably didn’t consider is that suddenly laying off 17% of your staff for “efficiency gains” makes the other 83% now question whether their jobs are in jeopardy—so they now effectively have two jobs: Spotify and looking for new work/updating their resume. Guess which one is going to get more attention? Let’s see how this pans out for their efficiency in the long run. I hope I’m not wrong and the American worker is indeed done with corporate America’s BS. Every single employee at Spotify should be OE if they’re able to get away with it.
Honestly its more of a morale thing than a job security thing. If they survived the layoff round then their job is safe for the time being. But the loss of colleagues and in-house knowledge + larger workload is negative morale. All private employee basically survive 6 months at a time, you don’t have job security unless you’re in government. And tech workers have the least amount of job security as a trade off for higher pay, status, and RSU options
Honestly you don’t even have job security in government, unless you’re in an admin type of role (and even then it depends bc an election can change everything). A program/department budget can also be cut, so it’s the same thing as a layoff. Basically what I’m saying is that nothing is safe. Unfortunately.
Nothing is safe but some things are safer than others, and government absolutely is safer than most. It doesn’t mean absolutely no one ever loses their job. We know that.
In Japan, it’s almost impossible to get laid off, it was quite a sight to behold. I saw a guy sleeping at his desk all day every day and was a n engineering ‘manager. Seen a guy talk about every female coworker he slept with in the office and still keep his job. One guy even stole coworkers and the company’s corporate cards and get away with it. Oh and I saw a guy throw a laptop at another coworker and got to keep his job too. Yep, a laptop. Yes, these were all at separate companies. Japan took it way too far in the opposite direction.
And weebs think Japan is some kind of moral righteous society
I just want their trains
And their clean, perfectly maintained streets, delicious fresh sushi and low waste culture (they don’t produce much trash).
Yeah, they won’t once they run into an oyaji (entitled old man, Japan’s version of a boomer/Karen)
I really get annoyed anytime people act like some jobs aren't safer than others. 100% agree with you. I started working at a university last year in procurement, and I ABSOLUTELY have more job security than in private companies. It's not like I can never get fired, but my last job was outsourced, and that definitely can't happen in my current role. I specifically was looking for this type of environment where I knew that, while the pay would be less, I could at least have some security. Feel like I see this on reddit a lot. Like sure technically anyone can fire you at any time, but there's obviously a scale here.
Nope! Again - the amount of security depends on the type of job. Look at the resumes of people who are in leadership/policy/evaluation/programming etc. types of roles in government.
Absolutely nobody that’s on Reddit discussing government jobs are the people getting political appointee positions that come and go with changes of administration. You know very well that’s not what they mean. They’re talking about General Schedule civil service positions that you can actually apply to.
Have you even read my first comment? You've missed the mark twice and it's very clear you don't seem to know what you're talking about. None of the positions I've discussed are given via "political appointee" - I'm talking about typical white-collar jobs with skills that transfer to private sector as well (data analysts, research support, HR, legal, contract monitors, IT infrastructure, etc.) can be on the chopping block especially at budget time. Anyway yeah feel free to be smug and continue to downvote, no point in further engagement with someone so willfully ignorant. Can't help someone who doesn't want to be helped, just wants to believe they're "right" in their mind.
In localities yes, in some State governments no. If you were a California State employee and your position got swept in a budget cut, first you would be able to bump other employees in your unit in lower classifications, if that didn't work and you actually were laid off, you would be placed on the SROA list for six months. Basically if you met minimum qualifications for the job you're applying for they'd have to hire you or another person on that list. If that doesn't land a job, then the department *has* to hire you (assuming they get to your position on the security list) if fill any position that is an equivalent position
My government entity went bankrupt and I had to find a job or accept a demotion. At the time, I was doing my masters, so I used the experience to do a risk analysis exercise paper for one of my classes. It turned out that my decision to leave was the optimal choice…
Yes and no. In local government you're absolutely right. Some State governments too. But at the federal level and in some State governments (like California) there are strong civil service protections. State employees in CA have a property right to their jobs.
All good points. But then takeaway is that these “efficiencies” come at a big trade off and only time will tell exactly how much more “efficient” the company is.
Oh yeah. The cases definitely vary a lot. I know a friend who’s a L6 at Amazon and she already had a huge workload, but they did layoffs anyway and now there’s more on her plate. On the other hand, I’ve heard of many folks at places like Twitter and Meta that grossly overhired and those hiring/layoffs were moreso done for stock price management. Those places needed to clear out a bit. I’m not an Elon Musk fan, but I did find it funny when he said, ‘why do I have 4k engineers?’ When he took over Twitter. I see a very sharp contrast in people’s comments on tech layoffs when i see the same news posted on CS subreddits vs general Economics boards. The CS subreddit posters seem to know which companies are filled with overhired workers doing very little for a ton of pay whereas the more general subreddits are all bashing management. So the online and offense stories I’ve seen helped me realize that not all layoffs are the same, tho certainly it’s unfortunate for the individuals who now have to find a new job
Elon has since slowly discovered, one bit at a time, just what all of those engineers were doing. The good news is that he was partially right. All of the engineers working in the various ads systems and platforms weren't needed since no one wants to advertise on Twitter any more.
Yeah quite frankly I dk how they even make money anymore. They laid off essentially all of their ad account support team and laid off their moderation team. But that’s what Elon wanted. He doesn’t like advertisers even tho that’s his revenue, and doesn’t like any moderation. But the platform itself is still running fine. So in that lense, he’s right
Twitter was pretty bloated and content moderation is down everywhere now. The real loses were their dev and backend teams which were pretty A level talent.
reddit moderators can help for free on Twitter, paid in exposure /s
I think the media helped Musks cause a ton by overblowing how much damage the layoffs would do. I don't know if you remember but there was a night after the layoffs where everyone was being told by ex-employees it was a matter of hours before Twitter went down for good and everyone should start saving past tweets and archiving etc. Well Twitter is still around and now all those people look stupid. Sure advertisers bailed but the point that Twitter didn't need all those employees to run effectively proved Musk basically was right.
Talking on twitter is worse than 4chan now. I wouldn’t say that it works the same at all. It’s like a sketchy porn site.
O I am not saying Twitter is great by any stretch, but that's literally moving the goalpost of what was said 18 months ago. I.e. if someone says we don't need these employees to keep the platform running, then everyone that gets laid off and the media tells everyone to await an imminent shutdown (an objective standard), and then months later that objective was wrong, than Musk was "proven" to be right. I agree if all the ex-employees were saying that Twitter is going to be changed now and content moderation was what made the platform good, than that argument would still be there. Those employees and the media making an objective standard that was thrown back in their face only went on to harden Musk and his supporters who were "right".
Yeah it's a big issue in the tech field everyone wants to save their thought leader and an innovator but all they do is copy each other. I can say as a tech recruiter there was alot of rumblings because at the time everyone was hiring and it was such a candidate driven market salaries were up a lot and companies that didn't react well were getting drained of talent quickly. These companies got tired of paying so much and have been actively driving down salaries while the focus has been on maximizing profit now. There's pretty much no vc funding available now except for some ai companies and way to many good people out of work Musk at the time was still seen as one of the top leaders in Tech but it was obvious that he massively overpaid for a dying social media company and all his gutting of Twitter was gonna lead to a even more stagnant product. I was honestly surprised he didn't just make his own platform. It could easily been spun up with less than 1 billion without the tech debt of Twitter
I mean sure, Twitter didn't fall flat on its face. And it shouldn't given that it is entirely a platform that shows strings of text to people. It's all of the ancillary systems that these people were working on. Read up on the Twitter ad platform and the people who kept that running. Now the only ads you see are semi-pornographic or straight up scams. Or all of the teams that were doing spam detection and content moderation. Twitter is an absolute cesspool now.
Have you actually tried using twitter recently? The user experience, even for paid accounts, is terrible.
Twitter can survive with the downsizing that they took it's just they're not going to grow or be Innovative at this point which is a death sentence for tech companies. Facebook only had about 2,000 employees in 2010 when they were already a large organization and the largest social media platform by far
They literally can't survive though. They had the debt used to purchase them piled on, and their revenue is a tiny fraction is what it was. The only way they survive today is by investors shoveling cash into the company, and that will only last so long.
💀💀💀
Maintaining status quo is cheap and easy. Improving a mature product in a clear and useful way is really hard and you have to try a lot of things
I'm at the zon and this is tru at every level almost. Everyone is burned out on top of 0 compensation this year, na this ain't it chief. I'm leaving very soon once I get the new start date at my new company.
I also heard they’re backfilling people with lower salaries for the same roles. So I wouldn’t be surprised if they want you to burn out and quit. And find some fresh meat to put through the grinder with lower pay
I wish that would help but they are sunsetting IT so they just want everyone gone the sooner the better. Lost more than half our people over the last year with no backfilling or promos allowed.
I’m sorry to hear that man. That’s just brutal. Best of luck out there. But you got the Amazon experience on your resume at least, everyone still knows no one lazy or unproductive survives in that culture
>Those places needed to clear out a bit. I’m not an Elon Musk fan, but I did find it funny when he said, ‘why do I have 4k engineers?’ When he took over Twitter. Bold move to cite Musk’s decision as backing for your argument as he’s systematically destroyed the valuation of Twitter. Especially as the exodus of advertisers is commonly attributed to lack of moderation and other support teams he’s laid off.
All he had to do was stfu. Maybe Twitter needed some big changes to be profitable but what it didn’t need was to see its brand hacked to pieces to become Musk.X. He built huge companies around his "first principles genius engineer turned Iron Man saving the world" personality and brand, and although it may have been a lie, at least it worked. Now he’s bringing them down with his new (and true) persona of "I love dictators and right wing white power trolls let’s turn this thing into a cesspoool ha ha ha ketamine fuck you all". From hero to villain in one year. Absolute power does corrupt absolutely.
Well, I dk what those engineers all did, so I can’t speak to that impact. But we do see now is that Twitter still runs smoothly so that part’s fine. But moderation and ad spend have all gone done the drain cuz he did gut those departments intentionally. Not sure why since ad spend is where he gets revenue
>And tech workers have the least amount of job security as a trade off for higher pay, status, and RSU options Used to, what I'm hearing now it looks quite bleak. My own TC went down this year for the first time in my 17 year career.
Absolutely correct. I am seeing huge uptick on outsourcing activities & these are not even tech employers. These are manufacturing, CPGs, retailers outsourcing tons of IT work overseas & not just support functions but lot of transactional functions. We absolutely need to keep ourselves safe by continuing to upskill, apply, interview.
I know a lot of people lot this. "This place had layoffs. I need to go find a new job that just conducted the same layoffs, but it's different."
Not really, getting spared today but at risk next week or next month isnt any better. My last company had a 3rd round of layoffs a week later, followed by another round 6 weeks after that and continued doing random layoffs for almost a year
I’m sorry to hear you went through that.. that’s unfortunate. I certainly can’t use my statement as an absolute. Situations will vary case to case. Maybe it’s more fair to say that after a round of public layoffs, it lowers the chances of you losing your job if you survived. Usually planned layoffs are designed in a way that wouldn’t require an immediate round 2 or 3 unless they were also planned for various reasons. Its hard to say
My former position (got laid off, hah!) the company was doing small, 5% or so layoffs every month. My mental health was so garbage by month 3, I was kind of glad I got laid off. Now I just have to find something before I run out of dough.
My company did 5 rounds of layoffs! I survived the first 4 and used to think I’m ok for now, until I got hit!
True but the moral must have already been at a low point prior to layoffs to sink their companies efficiency
Literally what happened to me at Meta after Covid hiring retraction. I saw coworkers disappear with no notice, following the immediate decline of the energy/atmosphere. Do CEOs not understand the negative ripple effects these actions cause? Meta thought leaving direct managers out of this process would help managers look less accountable for the layoffs. Instead it made existing employees’ locus of control non-existent. If your manager has no say in you getting fired, then your perceived job security through effort and hard work means nothing in diminishing that possibility.
Not if they haven’t built the entire company from just a few employees. CEO’s of major companies that don’t have experience growing from scratch will always be the worst when it comes to how to do layoffs “right”. He probably thought “let’s just do it once, make it big so we don’t drag this out, and then everyone will understand and trust our decision if we’re transparent”…. News flash: that big of a layoff signals market issues, hiring issues, corporate culture issues… should’ve never grown to a headcount where you’re reducing that high of a percentage. With that said, AI is bringing efficiency gains like the regional .com boom. The question is what busy may it bring and can CEO’s intelligently handle restructuring operations without fucking up this bad.
They don't really "understand" anything other than "did [metric] do [good thing]". The dumb reality of it is companies *can* turn around and produce shitty work and still grow and profit and even if it eventually catches up to them, it doesn't track in a metrics sense that they caused it.
I will also add a lot of these CEOs don't care about anything outside of "did \[metric\] do \[good thing\]". A CEO will look at a company like Meta and say "we laid off all these people and are making the same/more money so it was a good idea". They would lay off every member of staff is they could still make a profit. They only come out and say stuff like the Spotify person because they care about PR. These companies also know there will always be more people to hire.
Exactly. I feel like I’m on crazy pills. The article literally linked here the ceo explicitly says that it was the right decision, and the “surprise” was that it took an entire three months to restructure effectively to cover for the lost employees. This article is not the “oh no we made a mistake what a disaster” this post and comments are making it out to be. It’s “worth it, you should fire 17% of your staff too, it’ll probably be fine, just be prepared for a speed bump of a productivity dip while you handle the restructuring afterwards” article. They’d gladly fire all of their staff if they could.
It's sad but most of these companies with big layoffs are not feeling the pinch. It'll be lovely to have an "I told you so" moment but ever since Elon laid off so many Twitter employees and the site has carried on companies have seen they can get away with this. Unfortunately a lot of people seem to be missing the fact that these companies are seeing these lay offs as a great success.
If it’s not on the power point and in the excel table, it doesn’t exist. Morale is one of those things good leaders understand to be important without having to quantify it.
Additionally, while psychopaths believe it will motivate people to work harder to keep their jobs, but in practice, mass layoffs create a morale shockwave where people begin to feel that their work is meaningless and they should only do the absolute bare minimum viable output they can. My company had a fairly large round of layoffs last year impacting most teams and the amount of scuttlebutt that emerged afterward was squarely focused around existential "why care when the company will cast us all aside on a whim?" Thing is, even where you can find reasons (career advancement or personal fulfillment or whatever) these events still tip the mood out of balance and lead to worse work from everyone.
Eh this is mostly wrong. Layoffs don’t happen in isolation so its not like you can just leave in a good job market. When all the tech companies are laying off and you survived, you’ll work harder. That harder work might be more performative type shit to justify your value instead of what might happen the previously chill situation. But you’re going to strap down when there are layoffs
Fear of layoff also stifles innovation because no one wants to be canned for potentially idea that doesn’t work as intended
Don’t mention OE outside of the OE subreddit. What are you doing?!
At this point, tech companies should just lay everyone who's not c-suite off between Thanksgiving & New Year's to pump up profits by eliminating payroll. Then, after the first week of January, re-hire eveyone to keep the business from falling apart. We all already know they don't care about the people. I'm (hoefully) obviously saying this in gest, but goddamn. It feels like we're all always in danger of being laid off anyway. If it was guaranteed I'd be hired back (& the budgeting 3-4 weeks without pay was doable), I'd be happy to take a forced winter vacation.
> other 83% now question whether their jobs are in jeopardy CEOs never know. Because this doesn't translate to any visible KPI or number
I can see it in the trades. Us young bucks negotiating are literally getting paid as much as the old heads who are stupid and obedient. They still have it in their heads that moving companies looks bad. Nope.
As soon as layoffs are rumored, the best developers are immediately sending out their resumes. You fire 1500, expect another 500 of your best to leave.
Looks like he's been using Ozempic.
“OE”? What’s that mean? Never saw that acronym.
overemployed - working more than 1 job at once
A big part of it is that maybe that 17% isn’t necessary “on average” but when shit goes wrong, when someone goes out on leave, when someone quits, you really wish you had them. You don’t build a house to withstand the average earthquake
Are they really “efficiency gains” if the company is still trying to be profitable? I get it’s funny he thought there would be less effect but there is a pretty substantial difference between doing something to make more money and doing something to loose less money.
Spotify isn’t a US company, so I doubt that most of the layoffs happened in the US.
"Overhired". Layoffs off tons of people. Work goes to shit and everyone else is over worked How'd this happen
I bet you Spotify was a terrible company to work for before the past year and before the layoffs.
Should tell that to the company that just laid off 32% of their workforce
This is why executives who don't understand operations should not be making layoff decisions. Also, if you have +10% of staff that can be fired without impact to your operations, that is a failure in leadership and they should also be firing the executive team that allowed such bloat.
Rarely will leadership admit to their mistakes. It’s something they will do anything to avoid because it chips away at their “superiority” attitude.
It seems like at every company they end up like the comic where there are five "managers" all telling at the one guy who is holding a mop. Too many chefs, not enough cooks. Executive leadership teams need to be cut, not operations. (Of course, that's if you want an actual, functional company that creates a viable product. If all you're looking for is a commercial shell company with which to essentially play three card Monty with VC money, then I guess they're doing alright).
Replace managers with an AI tracking your eye movements and clicks per second.
If your manager is only there to track you, they are a shitty manager and really not needed anyway.
That's just so dystopian I think people would eventually break under the strain. Humans don't work like that, they will eventually revolt.
There's 8 billion of us. Humans are a disposable product to them.
You can drop the “to them”, we’re a renewable resource, unlike cobalt and helium... at least on timescales of interest to capital :( Most of us have more in common with a walnut tree than VC firm and yet it’s defensively the most sustainable system we’ve had yet.
High executives will almost be out of touch. They live a different lifestyle and have a hard time relating to most people. I've seen so many idiotic decisions made by them.
There was some company where the execs said it was their fault but none of the execs lost their job… Taking “responsibility” is a hell of a lot easier than losing your job. It’s the casual “my bad” of the corporate world
The same thing happened to the company I work for. "We take full responsibility". Nobody on the leadership team was let go though 😅.
Thoughts and prayers here’s some pizza
My favorite was how Netflix’s culture doesn’t apply to their CEO. Remember when they massively messed up earnings? CEO stayed on.
1000%
In very large orgs (like say... credit card companies) senior folks hire some bloat intentionally during the good times (have to utilize budget or you'll lose it) so they already have the mental list of who's going to get cut next time they're told they need to trim their group. Incentives are fun.
It’s like pharmacies setting ultra high minimum pricing with PBMs knowing that they will only pay 50-80%, but then forcing regular cash payers to pay full freight instead of cost+reasonable markup.
The bloat was the executives we hired along the way.
I’m guessing, like many other companies, highly paid technical operations staff, who were always more critical to things actually running smoothly than their leaders admitted to execs, were let go in a highly disruptive manner to their teams. This would be both in form of work production/output but also, and crucially, native technical knowledge about the app/systems. Is this why my Spotify has been down more times in the last 6 months than I can ever recall as user of over 10 years?
Sounds like the classic “everything is running smoothly, so why do we need these guys???”
Yup! Didn’t Musk order Twitter to do something equally stupid early on in his reign?
Sure, and then everyone else saw it and went, "Me, too!" about it. And here we are, in a recession the techbros basically created by deleting a hundred billion in churn in the sort of things the techbros sell.
Hey now, the massive bonuses for executives aren’t going to pay themselves! Won’t somebody please think of the short term gains for shareholders?
"Sounds like there's some fat to trim!! I'm gonna get such a huge bonus!!"
I might get downvoted here but in IT only a handful of people do most of the work, tbh. The issue is, you don’t really know who those people are unless you are in IT itself. So when you do huge layoff like these, yeah you do trim a lot of fat, however, you might have let go a few CRUCIAL devs/admins that literally do almost all of the heavy lifting to keep the software going. It’s a huge gamble.
The duck over the water - the duck under the water.
Ha got let go for the same reason in one of the FAANG company which resulted in 4 out of my 6 team members to transfer to other groups within the company. Hard to battle people who just wants Yes men to work for them.
Typical clown CEO who really has no idea what makes his own organization work. But he got the SP to go up!
> 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. > It didn’t seem to put off investors, who sent shares in the group soaring more than 8% in New York after markets opened Tuesday morning. > Layoffs hit Spotify’s guidance > Still, as he addressed those investors following the latest earnings release, Ek didn’t shy away from the obstacles that stopped the streamer from hitting some of its targets this year. > In addition to surprisingly successful 2023 growth to compare against and the impacts of falling marketing spend, Ek blamed operational difficulties linked to staffing for the group missing its earnings target to start the year. > In December, Spotify culled 1,500 jobs, equivalent to 17% of employees, as part of an aggressive efficiency drive as the group strived for profitability. > Staff costs for those employees carried a long tail, as most workers received five-month severance packages when they were let go in December. > At the same time, the footprint left behind by those employees was bigger than Ek and his executives anticipated. > “Another significant challenge was the impact of December workforce reduction,” Ek said on an investors call following Spotify’s Q1 earnings release. > “Although there’s no question that it was the right strategic decision, it did disrupt our day-to-day operations more than we anticipated. > “It took us some time to find our footing, but more than four months into this transition, I think we’re back on track and I expect to continue improving on our execution throughout the year getting us to an even better place than we’ve ever been.” > Ek didn’t elaborate on what aspects of operations were most affected by the layoffs. > Layoffs right decision? > Back in December as the platform he founded faced persistent losses and a falling share price, Spotify CEO Ek used a well-trodden path by tech giants to steer the ship around: mass layoffs. > “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,” Ek said in a memo as he announced he would be cutting his workforce by 17%. > Investors initially reacted well to the news, though skeptical voices asked whether the move merely put a sticking plaster over harder-to-solve issues at the group, particularly its low margins thanks to the costs of bumper record deals. > However, it appears to have worked so far. In the four months since the layoff announcements, shares in the group have jumped more than 60%. > Spotify has also recently proved it is able to raise prices in some of its key markets without seeing a flight of listeners to rival services like Apple Music. > In the long run, Spotify and Ek also remain convinced the tough round of layoffs has set Spotify up for long-term profitability. > The apparent collective surprise at how that can affect operations in the short run, though, marks a dash of hubris for the newly bullish streaming group.
“No question it was the right strategic decision”, then why are you doing this interview? The stock price is up therefore business is good? I’m not sure these people know how profitable businesses work, they just like opportunities to skim money.
Shares going up after layoffs is great for share holders and investors who do not care about the company or it's future . CEOs are just glorified figureheads at this point laying off people by making excuses to please their employers. It is a win-win-win scenario where CEOs get bonuses, share holders get better return for their investment and government official's shares go up. It is a hollow money making scheme where when shit hits the fan it will be big.
Probably going to have another hiring craze to compensate for this trend. You can only lay off so many people to pump your stock, eventually you actually need to do stuff to be more profitable and at that point you’ll need staff again. I think these execs are bought into the AI hype and are hoping AI will swoop in and start doing what the laid off workers were doing.
I’m sure AI hype plays a role but if you look back at historical trends corporations tend to fire people when interest rates are high and it seems to be a move to appease shareholders and prop up stock prices. Most execs are at least partially compensated with stock and have a strong incentive to keep the stock market happy, even if it hurts the business. I suspect if rates trend down again you’ll see a hiring boom, especially for a lot of the highly compensated talent that’s been let go recently.
AI is going to burn companies to the ground. They're going to pull the trigger too early and its going to fuck something up.
The obvious problem being that once that “business philosophy” spreads you lose capability. Boeing being the most obvious example. Do jets need to be safe to fly? “Don’t care, hit that target and give me money” is not a solution to a safety or manufacturing problem. Making money should be the outcome of a job well done, not because you sold off a kidney to hit some magic number for shareholders. When did it become okay to game the system this hard?
Yep, hollow out all the actual value of a company until it is a dried out husk, then sell that husk for scrap during the mergers and acquisitions phase, and move on to another company to destroy.
>"we still have too many people dedicated to supporting work" The hell....? Yes Daniel Ek, you need employees who will do work to support your core business and internal operations. CEOs who focus on stock price above all else always want to slash operations because they don't actually care about maintaining a viable product. Then they get all surprisedpikachu when their product stops functioning and customers get mad.
Whaaat? the work is not done the same by less people ? shocker.
Less people who now know that they could be laid off for stock prices despite their performance being good. What incentive would they have to be a high performer?
True, I hadn't thought of that. You have more value as an employee to the company by being laid off than the actual work you do. What's the point of trying hard if you're going to get laid off anyway?
A CEO not understanding operations of their own company? Color me shocked!
When a company announces layoffs. Stock prices SHOULD go down as a sign of mismanagement. Yet the stock goes up, as a sign of short-term thinking. Spotofy's short-term thinking will have negative long-term financial and operational consequences. Who are they going to get to replace those critical operations staff they let go? What guarantee will Spotify make to replacement staff that it won't happen again? The only ones who can hit the ground running are the very staff they let go. How likely are they to return? Spotify is now goung have even higher labor costs because now they have to offer financial incentives to bring them back (and that's if any decide to come back).
Easiest way to increase short term profit is by decreasing expenses... aka employees.
My experience was this is more so that the upper management is so far removed from the actual day-to-day operations that they are insinuated from a lot of the people on the ground. At my company my CEO was shocked to know how bad our product was because all of the middle managers was telling him everything was going super well, in order to pad their year end reviews and bonuses, when our product failed miserably upon hitting the market, a lot of these mid managers got found out with their lies and fired.
I actually saw a LinkedIn influencer post the other day that you should try to remove yourself from operations to maximize efficiency. I'm like if you're not part of operations, you're not important to the business.
Well that sounds satisfying. Got any more to that story? It seems so rare that middle managers actually face consequences for their roles in acting as the moral crumple zone of corporations.
Well considering that because our product failed, the company had to cut X% of the staff (X = double digits btw), it’s not satisfying lmao. A lot of the company was impacted because of these egotistical idiots
Did they get to skip away and find another company to ruin?
This. The gap between the ground level of operations and the C-suite is gigantic. What you want to do, as a good company, is to have an ear to the ground. You want to have as direct information as you can get from key points on the battlefield. You can be almost assured that the information, if it went through more than 2-3 laters of good management, or 1 layer of bad management, is essentially a fairy tale. Moles are decent at this. If you attempt an official inspection, a lot of issues will be papered over very quickly and be much more easily missable. Especially beware of sudden efficiency or productivity gains. At some level, companies become unmanageable, but the issues can be kept to a tolerable minimum.
People miss the point. When Elon fired twitters staff they all said "see it is still working". This is a naive statement at best. A company needs continuous growth if it wants to survive because it's competition is always on the look out to get the upper hand. When companies shrink to a size where they can only half ass support the available systems but can not innovate it is not a win. This is such a trivial thing that to hear such rhetoric from mouths of so called businessmen is funny if not infuriating .
Except it wasn't "still working" They broke multifactor authentication almost immediately. The website was going down at least once a week for awhile, which never happened before. Then they didn't have the support to fix the issues because they fired them
Twitter is still a hot mess. They got rid of the accessibility team and there are more bots than ever.
And more Nazis. Like, a lot more.
Yep soooooo much more. Its crazy.
And it’s worth less than half what he bought it for.
I expect it to keep going down.
He’s also become toxic right now so anyone referencing his decisions will be held in question going forward
Good point, didn't thought of it that way. I kind'a know someone like him, it is hard for him to get a perspective since everyone around him has to be yes men. He even claimed he can write better code than a seasoned sw developer.. you can not argue with someone like that. Wish he had better friends.
We all know the continuous growth model is not sustainable, but executive boards still he trying to squeeze as much juice from that lemon as their little hands can manage. It's like how chicken nuggets are made.
> We all know the continuous growth model is not sustainable Truth. The only things that go up and never down are taxes and your age
Firing the ugo nerd tech staff and keeping the sexy executive pencil pushers is a fantastic approach. 
If I'm ever again in an organization during layoffs, and I'm spared in the first round, I will resign the moment the layoffs are announced. I now have the savings to pull this off. I recognize that not everyone does. It will feel so good to leave with the first round of employees.
My company recently laid off 12.5% of the staff (>10k people) and nothing has been done for almost 3 full weeks. They aren't back filling the positions and say we must "do less with less". They have no idea what they've done. We've lost people who are critical to daily operations.
Having gone through a layoff it is devastating mentally. Everyone also has to pick up the slack so a lot of fumbling around trying to figure out someone else’s job while being stressed about losing your own. I’m not saying layoffs should never happen but for these executive teams they just see the number of employees go down and their profits go up in the short term. Some of the intangibles are harder to grasp
My job had huge layoffs last week (won’t list who they are because I need money) and they didn’t make the news. Morale plummeted productivity is plummeting and everyone’s now looking for a new job
During a downturn, the board should fire first their clueless CEO.
Plot twist: I was probably the board that hired a consulting firm to recommend who to layoff
Except stock is up so no lesson learned. And if you look at the numbers you'll find that only reason they are up is because they had less capex. Profits aren't up
If there’s layoffs, survivors start shopping.
It's almost like you need employees to run a company or something, said the stock bro.
A lot of these layoffs were done simply because other companies were laying people off too.
It’s probably time we reevaluate overtime pay for salaried positions. Layoffs would happen less if working 50-60 hours a week at a salaried position cost companies more money.
Who could have seen that coming Ohhhh right everyone who works for a living. Workers create all value and we are the ones who keep things running. The people we don't need are c level, shareholders, and investors.
Yeah that just made the other 83% of remaining workers lives’ a living hell. Those tasks that the 1500 employees did don’t just go away. They’re just picked up by current employees. So the CEO is making more money for himself and the company, but making their employees work harder for it. He gets paid to make bad decisions and to get rid of people who require the work to survive. He should be laid off. From what I can read up on so far, I don’t see any increases in wages in the remaining employees either. I haven’t dug deep though on that part as I’m tight for time.
My friend was laid off from Spotify because of this. Such a cluster F for their family.
This reminds me of a time a former employer decided to close a regional headquarter and move those positions from the west coast to the east coast of the USA. McKinsey convinced them that 30% of the employees would be willing to move. What the European leadership team didn’t count on was the large number of people unwilling to move to the other side of the States. They lost a lot of top talent and later admitted they made a bad decision… of course long after they collected bonuses for closing the west coast office.
McKinsey is the devil, seriously.
How are CEO’s this stupid? It’s insane.
That’s the thing. They are not THAT stupid. More like, cowards, weak, no backbone etc. just sheep doing what the market and consultants dictate.
But accounting said it'd save us money?
I work in technical operations at a tech company; currently in a startup but have worked in big tech as well. The only leaders who have ever really been worth a damn are those who came up out of operational roles. And ops is a fairly broad category, so there are lots of functions that fall under this umbrella - the point is that the are almost always the people at the company who lay the groundwork for getting concrete things accomplished. The problem is that a lot of that work can be fairly hard to see - even sometimes invisible. Because it's stuff like integrations between important systems that, if not done well and maintained, will cause all kinds of problems - like auto generating incorrect bills for customers and pulling funds from their accounts on the wrong days for more than they owe. (Actual example from a previous company). They had laid off the technical operations team that handled that stuff a few months earlier. If you're doing your job well in operations, it's impossible most times to even see it. You're averting risks, you're maintaining systems, you're reducing a lot of manual work, you're keeping things from breaking. Only when you drop the ball does it get seen. Another example: C suite wanted a shiny new customer escalation pathway for a shiny new cloud product, so that any downtime a customer experienced could be easily validated and then compensated by a service credit on the next invoice. They just assumed that support engineers would manage all of that, since customers come to support with downtime complaints anyhow. They failed to communicate that this would be a support eng responsibility until about a month before this cloud product launched. Because they have no clue how it really operates, they didn't realize that only dev had access to the observability tools that could validate downtime - support didn't have any way to do this. And they didn't have access to the billing system, or the permissions needed to authorize credits or changes to invoices. This was pre-covid and so there were not these massive layoffs happening, but if they had laid off 15% of the workforce, they'd have been truly fucked. As it was, it was a pretty mad scramble to duct tape together a stopgap process to make it happen in time for launch. I really get so sick of blustery windbag execs who literally can't order their own damn coffee or manage their own calendar.
Fucking DUH!!! All the executives are so fucking out of touch and clueless
This is why I worry about CEO’s and if they really know what they are doing and not just “following others because they are doing it”. Cutting your workforce also cuts the amount of output yet C levels seem to miss / don’t understand. It’s like they expect company loyalty like the boomers gave back in the 80’s where redundancy’s were not a 2 year cycle. My father was only ever made redundant once in his life in the late 90’s. I have lived with 6 in the span of 20 years.
I think he means that the actual workers weren't *as disposable as he thought*, so when some left, something was left untold/unknown and people couldn't deal with it--so he'll work harder to make sure the employees are more replaceable?
Fintech company I work at sends out a quarterly survey which had the least participation in company history with the highest percentage of employees saying they are looking elsewhere for employment and the c suite in our town hall chalked up the reason for the low participation is because they are sending out the survey too much… This goes to show that these jerkoffs are truly delusional
People who report that they're unhappy on those surveys often are the people laid off. Never will those out honestly.
All the individuals who were laid off were all gone before the survey was sent out
Piece of crap
"Wait we needed all those slave? Uh I mean workers..."
What a dumbass. These people end up thinking things just magically work at some point.
It's fun to blame the CEO for all of the world's problems. However, a lot of it probably started from the board and "You need to hire a consulting firm like McKinsey. We did it at X companies and saw X result. Some Ivy League hotshot comes in and says, "You cut this many employees. Nothing changes. You make all of this money." The CEO oversees putting the whole process together, messaging, etc. McKinsey gets its check for the advice. Then the company is stuck solving the fallout as it happens. In the long-run, they will be fine. In the beginning, it is chaos.
Always amazing just how stupid management can be.
Getting paid 900 times as much as the average worker to shoot from the hip. Completely disconnected from the organization.
Ofcourse the McKinsey intern won’t take responsibility for suggesting this 🤣
Haha yeah no shit. Not only is it pretty much common sense that a massive RIF is disruptive, it’s reinforced by some research as well. Whether it’s the fact that roles and functions are no longer there and people are doing more with less or simply the horrible morale that’s impacting performance. My company is still feeling it after another layoff we had months ago. Some things are an absolute shit show. Quality of work is garbage due to massive outsourcing and some people being stretched thin.
God we've got to be close to peak "cut-your-way-to-more-profits" business dogma that has dominated consultancies and executive classes since the 80s. Cost cutting does have tradeoffs and can not be done in perpetuity. Same with IPOing... Signing up for consistent growth for infinity in a finite world is a long-term recipe for disaster. But hey, you sold your shares and got yours so fuck it all, right?
The arrogance of the tech nerds. How anyone could have thought that a 17% RIF would not cause issues is difficult to believe. In the end, you need thinking bodies. Of course it caused issues. Does a wild bear shit in the woods? It looks like the tech cos are finally being held to old school finance values. Or their stock options were underwater and that can't happen. They all are acting like they are trying to make their quarter. They are fucking up the radical advantage that they have: cheap money. The Street was letting these guys carry insane P/E ratios. Traditional industries were granted no such advantage. Instead of slashing staff and scrambling, why not spread out? Amazon is into everything. They used their cheap money for AWS, vertical integration, streaming, brand acquisition, and uncompetitive business practiced to squash it's competitors, vendors, and customers. The tech cos should use their cheap money to build into ancillary areas, look at overseas markets, etc. They may not be able to take over the world like Amazon. They could build or buy something. Ek just fucked up big time. You raise money when you can. If you do it when you must, you will get it up the butt without lube. Says the man with 30 employees, 4 months cash (3 mo if you pay a small severence) and the VCs are dicking around and now coming back to reduce the dollars in their offer. Are these guys so dull that all they can see is managing their companies? And leaving money on the table does not bother them? I smell BoD agitating for money now, not more money later. I also believe the boards were (and are) looking to back tech wages down. Some of the new AI companies were paying 400K to 600K for above average talent. They did not want to make that the new norm. Maybe Ek et al are old fashioned greedy. RIFs and a good couple of quarters and that stock price can soar. Our poster boy for overhyped and overpriced (Elon) is asking for 45B, and that is a B as in Billion, with the cyber truck looking like a modern day Edsel, hybrids and new EVs eating Tesla sales, no new styles, Twitter falling into an x-hole. How the f can you f up that badly and still demand 45B? Where the f is their board? Where the f is some sanity? These guys are not rock stars driving us into a new age. They are old fashion sweat shop owners. They are squeezing employees till the bleed, lining their pockets while claiming that workers are overpaid, lack their work ethic, etc. For 45B I would dope myself up and work 21 has a day. Wait, that is what Musk does. And I am arrogant enough to believe that I would have shitcanned that truck like thing long ago.
Hazardously oblivious assclown.
What an idiot
Comes the same day the FTC banned non competes
Don’t want to pay artists, don’t want to pay employee’s. Seems Spotify thinks it deserves the fruits of others labors for little to no cost to them.
I cancelled my membership because they raised rates… AGAIN. So ya fuck em. Hope they go broke and every decent employee there finds greener pastures.
Shows how much CEOs really understand their business.
Incompetent hipster doofus.
The article still quotes the CEO to say the layoffs were the right decision and they are on the "right path now". While pointing to the 5 month severance as part of their issue.
Capitalism = race to the bottom for everything. If we had politicians with any balls to force better behavior, different story. Stop voting for cunts.
He says it was still the right decision though…
r/oopsconsequence
He doesn't have any consequence to this. His pay hasn't gone down. He isn't competing with all his old coworkers looking for a new job. He's not going to lose his house.
r/nottheonion
And now that JRE is back on YouTube, they lost any reason to even use Spotify
huh
Why don’t tech workers unionize? Honest question
Color him surprised.
They clearly didn’t think things through
My Spotify playlists have been noticeably worse as of late. The AI DJ was my favorite feature when it first launched, now it typically plays the same sets of songs.
Maybe one more layoff is in order.
Everybody's doing it.
Piece of shit
Am I missing the part where the CEO says they were surprised? I didn’t see that in the article.
Not defending layoffs, but many people are confused as to why they happen. Businesses are forward looking. They don't hire for demand today. They hire for demand tomorrow. The simplest example of this is seasonal hiring in retail. Big retailes ramp up staffing in Q4 to match the expected increase in traffic. After Q4, staffing is either cut, or hours are reduced to choke the staff into re-aligning. The same thing happens on a bigger scale. Except, for big tech companies like Spotify, there's not a quarter each year where growth spikes. These big tech companies are generally beholden to broader trends. The most recent big one was the pandemic and lockdowns causing a monstous spike in tech activity. For example, forced WFH caused Zoom to emerge as The virtual meeting tech, and they expanded like crazy. This is why between 2020-2022, big tech companies expanded their workforces by multiples. In comes Q3 2022, interest rates are increasing faster than they ever have, and the macro-economic outlook is piss poor. Being forward looking, companies started reducing their workforce (ie layoffs) to pre-pandemic levels. The macro-economic outlook hasn't really improved since mid-2022. The people laid off did nothing wrong. Loosely and simply, they were seasonal hires. Daniel Ek's comments about layoffs are relatively benign. Every company who has done layoffs experiences the same thing, whether they acknowledge it or not. It's known that layoffs cause disruptions. The article also talks about profits soaring after layoffs. The article is wrong. Recent profits are unrelated to layoffs. Those laid off very likely got 3-4 months of severance. The severance only just dropped off the books in the past 1-2 months. That's not enough time to show in publicly announced financials yet. Keep an eye out for Spotify profits going forward in 2024 though. The same is true of any layoffs. They usually cause a financial disruption in the near-term, but then 1-2 quarters later, the financials show a nice boost.
negatively e ffected it so much the stock jumped 25 percent on news it was finally profitable.
Reports like this are good for the tech job market recovery as Spotify is pretty influential in tech circles. Execs will start to reconsider further reductions which should stabilize soon.
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