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"..Spotify had taken advantage of cheap borrowing during 2020 and 2021, when central bankers cut interest rates sharply in response to coronavirus pandemic lock
by 5350-uiop-1130 3y ago
"..Spotify had taken advantage of cheap borrowing during 2020 and 2021, when central bankers cut interest rates sharply in response to coronavirus pandemic lockdowns"
> “Embracing this leaner structure will also allow us to invest our profits more strategically back into the business,”
> invest our profits more strategically back into the business
why didn't they do this in 2020 when they got zero interest loans and free money from the government?
profits are for "strategic" investment but loans are for un-strategic and unsustainable hiring? got it.
- draw_down 3y ago[dead]
- mewpmewp2 3y agoI don't understand the question? They were able to use money more freely as it was more abundant, so they were able to take more risks. Now that money is more expensive, they need to be more careful about it.
- ethbr1 3y agoI think parent might be overemphasizing strategic in that quote. >> This is not a step back; it’s a strategic reorientation. We’re still committed to investing and making bold bets, but now, with a more focused approach, ensuring Spotify’s continued profitability and ability to innovate. "Strategic" could be replaced with "efficient". They were previously optimized for growth -- now, they're optimizing for growth:krona. Also, it is refreshing to see a head cut announcement that doesn't bury the lede: we're firing people, and this sucks.
- rchaud 3y agoWhen a company is publicly traded, mass firing announcements are no longer buried, it's red meat for shareholders.
- ethbr1 3y agoWas lessso taking issue with burying, and moreso with the recent spate of bullshit "This is good for everyone" or "The world suddenly changed" or "This was always the plan" posturing in announcements. "We optimized for one thing. Things changed. No we're optimizing for a different thing." Doesn't need to be more obfuscated than that.
- mikrl 3y agoMore so now that it’s their own money and not yours they’re being more careful with it.
- 5350-uiop-1130 3y ago> "They were able to use money more freely as it was more abundant, so they were able to take more risks. Now that money is more expensive, they need to be more careful about it." > able to take more risks so who pays for consequences of the "risks"? my whole point was to illustrate the idea of privatizing profit and socializing losses.
- rchaud 3y agoThey invested the pandemic ZIRP bonanza on the 'transformative' IP that is podcasts. In lieu of actual profitability, they also chucked in $1bn to buy up their own stock to maximize the CEO's already enormous compensation. https://techcrunch.com/2021/08/20/spotify-to-spend-1b-buying-its-own-stock/ https://techcrunch.com/2021/08/20/spotify-to-spend-1b-buying...
- bogomipz 3y agoWow, it's pretty wild that an unprofitable company spent a billion dollars on share buybacks.