Spotify Lays Off 1,500 as Revenues Climb
Spotify Lays Off 1,500 as Revenues Climb
Spotify suddenly started making a profit in the past few months, but CEO Daniel Ek said "being lean is... a necessity."
I've seen this exact headline about over a dozen tech companies in the last few months, particularly in the games industry. How do we make sense of it? I am not accustomed to seeing companies that are doing well, as they all claim to be, discharging swathes of their labor force.
This is a fairly common process in the American manufacturing industry. Build up a good productive workforce, do layoffs to lower the payroll budget, then ride on the wave of profits.
It's big short term gains that shareholders love, but generally destroys most of what made those profits so good in the first place.
It's also using its monopoly status to reap profits. If you want to easily listen to music and have shareable playlists - very simple things to do, technologically - the limiting factors are actually the music industry IP owners and the network effect of already having a critical mass of people, i.e. a natural monopoly.
That's about what I expected, but I've been phrophecizing the collapse of the app economy for like a decade at this point and it seems almost too good to be true.