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> Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was th

by rob74 3y ago

> Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives. or, otherwise said: "we fired you to make our bottom line look nicer"

TapWaterBandit 3y ago
Eh, what's the alternative? Some people have this weird attitude that businesses are not allowed to shrink/fail. Businesses can only ever go one direction and that is more headcount, otherwise give them govt bailout. Businesses need to be able to grow and shrink. Otherwise we just end up with "too big to fail".
- robin_reala 3y ago
  I don’t think the complaint was in the action, but the horrible wording.
  - epistasis 3y ago
    I'm not sure which of the wordings is supposed to be worse. They are both bad. But that is the nature of a company on the edge of survival.
    - hackernewds 3y ago
      Spotify is not merely surviving. They have numerous monopolistic exclusive contracts and paid $200M for Joe Rogan's podcast. Be the judge on whether that's worth 1500 employees keeping their job
- acdha 3y ago
  It’s not that businesses can never shrink but that it should be considered and linked to a specific reason (e.g. a change in business strategy or consumer preferences). If they were, say, RIM a decade ago, layoffs would make sense once they had no path back into the consumer market and also were bleeding cash to the point where they soon wouldn’t be able to make payroll. When the Cold War ended, manufacturing layoffs were inevitable at some of the big defense contractors because the market for stealthy aircraft shrunk and nobody else needed to buy them. A layoff this large means one of two things: the management screwed up on an epic scale (and should be the first to go) or it’s just giving investors a short-term stock boost at the expense of long-term success. Broad layoffs are usually bad for companies long-term because they signal both a lack of management skills and mean that everyone still working there is going to be worried about another round, so politics and making yourself harder to replace will consume a certain amount of otherwise productive time.
- marcosdumay 3y ago
  Well, IMO they have a duty to not be frivolous on firing. It must not be something impossible to do, but it must be hard. And they should favor most other courses of action. But anyway, it's up to the government to enforce this, and the US (where they are hosted) seems to almost completely disagree. So we get those companies hiring like mad, just to fire like mad in a couple of years, and begin the cycle again a few years down.
surgical_fire 3y ago
Er... There's nothing wrong with that. I mean, we do live in a world where businesses are supposed to be profitable. Companies hire and companies fire, that is part of the deal. One thing is to have layoffs when you are raking in record profits. This doesn't seem to be the case. The text makes a decent enough case.
- hackernewds 3y ago
  sure, but call a spade a spade instead of making the layoffs seem mandatory. there are inputs to financial goals - including executive greed.
  - rob74 3y ago
    Or stock market greed... of course, if you subscribe to the "greed is good" school of thought, you may also see that as positive.
    - School-Cotton 3y ago
      Not sure if I’d go so far as saying “greed is good”, but if it weren’t for the expectation by investors that companies would attempt to be as profitable as possible, companies like Spotify wouldn’t exist.
    - lotsofpulp 3y ago
      Spotify stock has lost 10% per year relative to SP500 (riskless). It is crazy to call not wanting to lose 10% per year “greedy”.
  - styren 3y ago
    Well, if they determine that firing 17% of staff will lead to greater profits then it seems pretty mandatory based on his fiduciary duty to the board.
    - acdha 3y ago
      That’s mythology: executives have no such obligation to either shareholders or the board because business decisions are very rarely unambiguous wins or losses, and a great deal of discretion is given to their judgement over any non-trivial timeframe. Consider, for example, the number of people who thought turn of the century Apple should become a Windows reseller or, later, sell the iPod brand to a business which understood how to be successful in the phone market like Nokia. There were certainly times where that could have generated a great deal of short-term gain, and it was easy to find some analyst prattling on about why they had to do it. In the case of Spotify, the only situation where 17% of their company is an unambiguous waste of money with no benefit to the future business should be accompanied by the CEO’s resignation because that would be an enormous managerial failure in the hiring process. Since it seems unlikely that even 1% of their workforce is that bad, it’s far more likely that this has nothing to do with long-term success and everything to do with pleasing the activist investors and consulting firms who’ve been pushing the idea of layoffs as a way to remind workers not to ask for more.
make3 3y ago
? it's a normal capitalist corporation, what exactly did you expect
dehrmann 3y ago
That's not wrong, but they also hired-up for a new podcast business that wasn't as successful as they hoped.

by rob74 3y ago

TapWaterBandit 3y ago

Eh, what's the alternative? Some people have this weird attitude that businesses are not allowed to shrink/fail. Businesses can only ever go one direction and that is more headcount, otherwise give them govt bailout. Businesses need to be able to grow and shrink. Otherwise we just end up with "too big to fail".

robin_reala 3y ago
I don’t think the complaint was in the action, but the horrible wording.
- epistasis 3y ago
  I'm not sure which of the wordings is supposed to be worse. They are both bad. But that is the nature of a company on the edge of survival.
  - hackernewds 3y ago
    Spotify is not merely surviving. They have numerous monopolistic exclusive contracts and paid $200M for Joe Rogan's podcast. Be the judge on whether that's worth 1500 employees keeping their job
acdha 3y ago
It’s not that businesses can never shrink but that it should be considered and linked to a specific reason (e.g. a change in business strategy or consumer preferences). If they were, say, RIM a decade ago, layoffs would make sense once they had no path back into the consumer market and also were bleeding cash to the point where they soon wouldn’t be able to make payroll. When the Cold War ended, manufacturing layoffs were inevitable at some of the big defense contractors because the market for stealthy aircraft shrunk and nobody else needed to buy them. A layoff this large means one of two things: the management screwed up on an epic scale (and should be the first to go) or it’s just giving investors a short-term stock boost at the expense of long-term success. Broad layoffs are usually bad for companies long-term because they signal both a lack of management skills and mean that everyone still working there is going to be worried about another round, so politics and making yourself harder to replace will consume a certain amount of otherwise productive time.
marcosdumay 3y ago
Well, IMO they have a duty to not be frivolous on firing. It must not be something impossible to do, but it must be hard. And they should favor most other courses of action. But anyway, it's up to the government to enforce this, and the US (where they are hosted) seems to almost completely disagree. So we get those companies hiring like mad, just to fire like mad in a couple of years, and begin the cycle again a few years down.

surgical_fire 3y ago

Er... There's nothing wrong with that. I mean, we do live in a world where businesses are supposed to be profitable. Companies hire and companies fire, that is part of the deal. One thing is to have layoffs when you are raking in record profits. This doesn't seem to be the case. The text makes a decent enough case.

hackernewds 3y ago
sure, but call a spade a spade instead of making the layoffs seem mandatory. there are inputs to financial goals - including executive greed.
- rob74 3y ago
  Or stock market greed... of course, if you subscribe to the "greed is good" school of thought, you may also see that as positive.
  - School-Cotton 3y ago
    Not sure if I’d go so far as saying “greed is good”, but if it weren’t for the expectation by investors that companies would attempt to be as profitable as possible, companies like Spotify wouldn’t exist.
  - lotsofpulp 3y ago
    Spotify stock has lost 10% per year relative to SP500 (riskless). It is crazy to call not wanting to lose 10% per year “greedy”.
- styren 3y ago
  Well, if they determine that firing 17% of staff will lead to greater profits then it seems pretty mandatory based on his fiduciary duty to the board.
  - acdha 3y ago
    That’s mythology: executives have no such obligation to either shareholders or the board because business decisions are very rarely unambiguous wins or losses, and a great deal of discretion is given to their judgement over any non-trivial timeframe. Consider, for example, the number of people who thought turn of the century Apple should become a Windows reseller or, later, sell the iPod brand to a business which understood how to be successful in the phone market like Nokia. There were certainly times where that could have generated a great deal of short-term gain, and it was easy to find some analyst prattling on about why they had to do it. In the case of Spotify, the only situation where 17% of their company is an unambiguous waste of money with no benefit to the future business should be accompanied by the CEO’s resignation because that would be an enormous managerial failure in the hiring process. Since it seems unlikely that even 1% of their workforce is that bad, it’s far more likely that this has nothing to do with long-term success and everything to do with pleasing the activist investors and consulting firms who’ve been pushing the idea of layoffs as a way to remind workers not to ask for more.

make3 3y ago

? it's a normal capitalist corporation, what exactly did you expect

dehrmann 3y ago

That's not wrong, but they also hired-up for a new podcast business that wasn't as successful as they hoped.