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

cross-posted from: lemm.ee/post/30272690

When Spotify announced its largest-ever round of layoffs in December, CEO Daniel Ek hailed a new age of efficiency at the streaming giant. But four months on, it seems he and his executives weren’t prepared for how tough filling in for 1,500 axed workers would be.

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

However, the company failed to hit its guidance on profitability and monthly active user growth.

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

peteypete420 ,

Faaacck. People know of any music streaming services run by someone not a complete asshole?

With the the way spotify integrates with my ps4 it’ll be tough to give it up, especially with the all Playlists and followed artists I’ll need to copy over…

But yea willing to try.

wanderingmagus OP , (edited )

Reject streaming, return to mp3? Although I know storage is always an issue these days.

Edit: I’m hearing really great things about Tidal, which is apparently cost-competitive for music, and Deezer, which also does podcasts, if you’re set on streaming.

peteypete420 ,

Yea I don’t think I can go back to any type of storage based music. Tidal is what I have been looking at, was bought to my attention a little while ago. I’ll check put deezer too.

FireWire400 , (edited )
@FireWire400@lemmy.world avatar

Tidal is a great alternative in my opinion; they pay artists a much higher percentage per stream, you get more for the same money and their CEO isn’t a complete dickwad, I think.

It’s not so great for podcasts, though.

Son_of_dad ,

I bet you they just expected the remaining staff to pick up the slack.

Don’t do more than what you’re paid for. Don’t do favors for your bosses. Never give 110%. Because come pay time, they won’t be as loyal to you as you are to them.

EnderMB ,

What a stupid fucking cunt.

Having watched tens of thousands lose their jobs at Amazon…yes, a lot of shit falls apart when you remove roles that were previously doing stuff. On top of this, survivors guilt, and the fear of more layoffs basically kills productivity. If you don’t understand this as a CEO, you should be first in line for the billionaire guillotine.

nikaaa ,

I bet he now expects the remaining employees to work overtime because they’re “understaffed”.

athos77 ,

"We are currently experiencing higher than normal call volume. Your call is very important to us. Please continue to hold ... "

otp ,

I hate that message so much. It doesn’t mean a damn thing. Sometimes someone picks up during the message.

Just say something like “Thanks for calling [company]. Please hold for the next available live agent”. Don’t give me any excuse (especially not about covid or the pandemic), and put the music on as fast as possible.

ahal ,

They’re hoping it gets you to hang up and keep your petty problem to yourself.

MrMcGasion ,

One of the companies I frequently have to call for work gives a high volume of calls due to the storm systems moving across the United States. They added it like a year or so ago when California had all that flooding and the east coast had a couple of hurricanes. But it’s still on there as an excuse.

unreasonabro ,

it means “fuck you” and you should take it as such.

Dantpool ,
@Dantpool@kbin.melroy.org avatar

Oh, this is why it's been taking months to fix issues with the app.

FilthyShrooms ,

This is what happens when you prioritize quarterly profits over all else

Maeve ,

Fiduciary duty is going to kill everything good.

kescusay ,
@kescusay@lemmy.world avatar

Someday, a large corporation is going to finally figure out that firing the people who make their products work results in shitty products no one buys. And instead of firing those people, they’ll fire the bean counters and outside consultants who promised that this quarter’s revenue will look great if they stop employing people to make their stuff.

But today is not that day.

NegativeInf ,

Nah. It’ll be never. So long as they can spend good money to have Mackenzie tell em firing X employees will raise profit .0Y%, they will do it. Because anything else to improve profits would require actual work and investment. And that doesn’t show immediate profitability.

Klairabelle ,

Believe it not hospital boards are like this too. Profits > quality patient care especially when they’re made up of the ‘good ole boys’

Maeve ,

You ought to see what goes on inside the third-party payer corporations.

Klairabelle ,

It’s money grubbing all the way out 🥲

Maeve ,

You already know

deweydecibel ,

Someday, a large corporation is going to finally figure out that firing the people who make their products work results in shitty products no one buys.

The problem is, this isn’t true. The first part certainly is, though many companies are perfectly capable of making shitty products no matter how many employees they have.

The second part though? I would certainly like to believe that, but it’s simply not what happens, especially when it comes to apps and services like Spotify. A huge part of why so much in the tech industry is just absolute ass now is because users are unwilling to try alternatives. Vendor lock in tactics have succeeded, but the average consumer is just lazy and complacent too.

The user experience of Spotify has been dropping dramatically for years. They haven’t lost any users. They have boiled one of the most well cooked frogs in the entire tech industry. And even if you they have a significant portion of users who do actively complain about it, they probably can’t even name an alternative streaming service besides maybe Apple music, and there’s certainly not tech literate enough to understand that you can transfer your library and playlists to another streaming service really easily.

I’ve legitimately explained this to multiple people I know personally who are incredibly frustrated with spotify, and all of them reacted the same way: at the slightest suggestion of putting in a little bit of effort to move away from the platform that they despise, their resolved disappears.

And it’s exactly that mentality, widespread, across so many industries, that allows CEOs to get away with shit like this. They are never punished when consumers are so unwilling to change their habits.

Maeve ,

People get hung up on brand recognition and corporations definitely exploit this.

GreatAlbatross ,
@GreatAlbatross@feddit.uk avatar

They have boiled one of the most well cooked frogs in the entire tech industry

Plus, there isn’t that much by way of an alternative for the same money. *Edit: I’ve just done a little legwork, and Tidal might work for me…*Even with the recent price hike, it’s £4/user/month for a family plan, for access to 95% of the world’s music.

For all its flaws, and really hit-and-miss algos, I struggled to find something better for around the same money.

meowMix2525 ,

you can transfer your library and playlists to another streaming service really easily.

Mind elaborating on this?

mojo_raisin ,

If you think of corporations as tools, like a straw used to suck resources from the working class it makes more sense.

The goal isn’t corporate fitness, it’s not even corporate profit exactly. The point of a corporation is to make money for those in control of it, who are probably on boards for several other companies and can make new brands and pay to manage reputations as needed.

From a class perspective, this was arguably wise. That CEO will probably get a massive bonus and the board can profit off of the stock price fluctuations. Operations are not that important at this stage as long as it’s functional-ish. The name “Spotify” can be tossed or rehabilitated by PR firms.

LdyMeow ,

Eat the rich.

rem26_art ,
@rem26_art@fedia.io avatar

idk something tells me that maybe, just maybe, those 1500 people actually did something at that company. I'm not a CEO tho so I can't be sure.

MrJameGumb ,
@MrJameGumb@lemmy.world avatar

Are you a poor CEO in need of more income? Just fire ALL of your employees and run the whole company your damn self since you think it’s so easy! Now you get 100% of the profits! GREAT SUCCESS!!!

seaQueue ,
@seaQueue@lemmy.world avatar

Let me play him the world’s smallest violin. You don’t get to fire 1500 people because shareholders think it’s neat and then cry about how hard you have it. This guy can fuck off.

PlutoniumAcid ,
@PlutoniumAcid@lemmy.world avatar

Call him a skitjävel. He’ll understand.

Maeve ,

Ouch

AtariDump ,

https://i.imgur.com/QgUmzYz.gifv

Drewelite ,

I mean, it’s nice to hear some regret. Maybe other CEOs will take note… Probably not. But maybe

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