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An alternative viewpoint: Their costs are too high for what they can reasonably charge. Hence the layoffs. They could probably cut half of their workforce.
by selfmodruntime 3y ago
An alternative viewpoint: Their costs are too high for what they can reasonably charge. Hence the layoffs. They could probably cut half of their workforce.
- Mindwipe 3y agoTheir workforce is a fairly small part of their costs.
- lotsofpulp 3y agoPage 1, the R&D, sales and marketing, and general and administrative expenses are probably almost all payroll expenses. And they are basically equal to or exceeding gross profit, which means payroll is a huge expense. https://s29.q4cdn.com/175625835/files/doc_financials/2023/q3/787b611a-8789-4a1a-86de-055ba2ade19a.pdf https://s29.q4cdn.com/175625835/files/doc_financials/2023/q3...
- Mindwipe 3y agoWhy are you comparing it to their gross profit and not to the rest of their costs which is what I said? Ultimately Spotify's staff costs are significant because they were throwing people at trying to make the podcasting business work, which was a failed bet but they need to do. The main issue though is that buying licenses to music is just too expensive for the amount of money they charge, and they need to license less stuff or charge more money.
- lotsofpulp 3y agoBecause of the expenses Spotify can control, payroll is (seemingly) its biggest one. Spotify is never going to be able to reduce the proportion paid to the music owners.
- selfmodruntime 3y agoThey have 9500 employees. Just salaries alone at a very conservative (for american standards) 75000$ average make up 700 million dollars a year, excluding healthcare and other expenses. Payroll is definitely a huge cost.