Can someone explain to me why a company that is about streaming mp3s needs 9500 employees? That just sounds extremely inefficient to me. They don't even have native desktop apps.
All of these hp tech start-ups/scale-ups overhired when money was cheap to signal growth and confidence to investors, even if they didn't need that many workers, nobody cared, as long as "line goes up".
This is nonsense. They hired people to grow users, usage revenue, not to brag about employee counts. Companies brag about maximizes revenue per employee.
I grew up with someone who is now in the C-Suite of one of America's largest corporations - a company that has been in the Fortune 100 for decades. He has bounced from directorship to C-Suite in Fortune 500s for the past 12 years, and I asked him about this phenomenon over cigars about six months ago, he said this:
"cbozeman, you have to understand these people. Most of these people making these decisions are raging narcissists. What do you think sounds better?
'I managed and led 500 people.'
'I managed and led 5000 people.'
And when you compound that on top of essentially free money, and then you also throw in the desire to lock up the best talent so your competitor can't have them, you have a recipe for indiscriminate hiring."
This person has been working in a high-level capacity in the corporate world for over 15 years now. He has seen some truly reprehensible shit, and shared quite a bit of it with me when we meet up once a year for ice fishing. I can tell you right now, not only is not "nonsense", it's perfectly logical - just not to you, and not to a lot of other HN users, because entirely too many people think in the logic of 1s and 0s, and not in the logic of people. High-level business decision makers - the kind who make these decisions - don't think like you. They don't value what you value. They see engineers and programmers as expendable and easily replaceable - and many of them are. For every 10x or 100x engineer / programmer, there's 500,000 no-namers who can be slotted in and out without much trouble.
I was talking about pay not perks. How much do FAANG/big-tech workers earn vs everyone else in the industry.
And maybe let's not victimize big-tech workers so much. Yeah, you have 17% chance of being laid off, but while you worked there you managed to save way more than people who work elsewhere.
And everyone gets treated as cattle. But big tech workers get treated like those premium beef freerange cattle that get massages and fetch 200 dollars per kilo VS everyone else that gets treated like a slaughterhouse cattle.
Well, this is another version of the classic "I could build this in an weekend" trope.
9500 is probably excessive, but think of it just this way:
1. Spotify has a worldwide presence, apparently 184 markets; that probably entails a legal presence in many of those jurisdictions, sales, marketing, support, localization, etc.; at a conservative 2 persons per market, just that's going to generate about 400 jobs; now, most of those markets will be grouped up but the big ones will probably have tens if not hundreds of people dedicated to that market (the US is likely to have hundreds of people supporting it, for example).
2. Spotify has to build, update, maintain, extend, etc a global infrastructure. Just the ops team for that has to cover 3x 8h shifts to make it 24/7. Each region should have at least 3 people in it, for high support availability. That's 9 people right there, and it would be crazy to support ~550 million active users with 9 people, they probably have 10 times that many people and teams supporting various components. So just an ops team of 100 is perfectly reasonable.
3. Then they need a dev team. They have... ads, various integrations, songs, audiobooks, podcasts, their apps or whatever are available on smart TVs, web, cars, bla bla bla, if it's 10 people for each client, that would probably mean at least 50 people. And 10 people per client is probably silly low, make that at least 100-200.
4. Then they have a bunch of backend services, probably a lot of them. Plop another 5-10 people for each service. That's going to be many more hundreds of people.
5. Then they have actual R&D, where they're exploring stuff. This depends on the company, but for a company that's still clarifying its business model, having 100 people researching stuff sounds reasonable.
That's ~1500 people just from me eyeballing their business. 9500 is maybe on the high side, but considering their scale, if we dig deep enough into their business model, probably 5000 is perfectly fine.
These services are crazy complex and "streaming mp3s" is a very reductive view.
That, and people often forget that - even if we stay on the engineering side of things - Spotify has tools and apps for artists, creators, and advertisers that most users never see.
I certainly couldn't build that in a weekend but nor would I need 9500 people. Keep in mind WhatsApp was running with 50 engineers in 2015 when it had 900 million users. Last year, according to some sources, it had 3000 employees and 2.4 billion users. And that's groups, voice messages, video and voice calls, WhatsApp for business, integrations and a lot more.
Some of these seem reasonable, some not. There is no need for legal presence everywhere or to even have a permanent hire for that. The many clients make sense (including consoles too) but more than 10 people per client? It's not the most complicated app. R&D I guess makes sense too.
Actually, it would be interesting to see the breakdown of employees by category.
Regardless, I think the answer lies somewhere between what you said (unknown at a glance costs) and what others have said - too many managers managing managers and overhiring.
Whatsapp is just sending messages. Here's music recommendation lecture on using latest techniques to better serve users. I am glad that their music recommendations are very good. There are so many nooks and corners in a big company like Spotify where you need someone to be responsible for.
While I think you're low on the legal/sales/marketing and so on, your estimates does trigger the question: How much easier/cheaper and profitable would it be to run Spotify as a purely stream music platform.
Lose the ads, audiobooks, podcasts, drop any platform that isn't iOS, Android or web. Would that be profitable, or would people not want to buy the service?
Spotify does awesome music recommendation - there are no human curation involved like with Apple Music afaik - you probably need a whole bunch of people for this.
They do much more than merely streaming mp3's and they working on a video product as well - there is some content creation as well i.e agents , sales , marketing and producers.
You can probably can compare them to Netflix (12,800).
More and more it seems they're an advertising company that also serves music and podcasts. I keep seeing sponsored recommendations and I'm a premium subscriber, for now.
Apple made $5B in ad revenue in 2022, which was double their ad revenue from the year before. Apple is already being devoured from within by ads. If you think Apple will never stoop to putting ads in the OS like Microsoft does, ask yourself: where are Apple users going to go to escape ads? Linux? No, they'll just deal with it and keep buying Macs and iPhones. Apple is not your friend, they are a company designed to make money at all costs, and they're not going to leave ad revenue on the table.
They did, repeatedly. They are the only one company offering deep e2e solutions that are absolutely incompatible with the data profiling needed to scale ads operations to Facebook or Google levels.
Also, where did you derive your figure from? Apple breaks down services, they don’t say how much they make with ads.
Even If that estimate was correct, Apple’s ad operation would still be a blip in comparison to the other players.
Apple is of course a corporation with one goal, making money. I trust the people of that corporation to be smart enough to know how to balance that and the ways it can be achieved. Bringing ads everywhere is not conducive to that, and it would probably make them less money in the long term. That means: it won’t happen.
I only have one request: know what you’re talking about before you talk about a company.
Agreed, they're spending a lot of effort to be better at pushing "recommendations": the DJ, "smart" shuffle, the new home screen UI that prioritizes recommended new releases, concerts, and merchandise.
Those are all ad slots. They want artists to pay to be included in those in the future.
I doubt even half their staff is product development. Acquiring and licensing content is very complicated. Marketing, advertising and operations. Their entire podcast stack includes not only end-user experience, they own multiple podcast production and analytics tools (via acquisition of Megaphone, Anchor, Chartable) not to mention their in-house production via stuff like Gimlet.
I could understand so many employees for seemingly simple-ish tech services like this if 9000 of them are working in the customer support / tech support department. Wishful thinking though I guess.
I'm wondering what it is that they're doing all day. The spotify app randomly changes, and if so, rarely for the better. I'd wager spotify could benefit from X' style layoffs.
The X layoffs are too soon to make a judgement call on, look at the advertiser fight X is involved in now. Its up in the air if they kept enough people to make advertisers happy or moderation. Moderation has become a real problem on X, Ive sent reports that were clearly a problematic account, sometimes even fake accounts that are stealing identities, and the X UI sends me a message saying "nah all good"
The advertiser fight is primarily caused by Musk's inane comments, not layoffs or the lack of moderation. They do contribute, but to a way lesser degree.
So he didnt layoff part of the advertising team? It seems to me to be directly related to moderation, since its the usual "we dont want our ad to be near X" X being something advertisers steer clear of.
