[karl11]

Revenue is irrelevant when looking at savings, you have to look at net revenue or gross margin. Majority of Spotify’s revenue goes to record labels. If you are making -40mm / yr then a $90mm swing is a huge deal.

Also, can’t just look at salary - employees cost a lot more than their salary. 10% employer tax, health care, other ancillary benefits, IT equipment / space, etc. A $150k salary probably costs the company $250k all in.

[oxfordmale]

The cost picture is as follows:

money saved on staff reduction - money spent on layoff packages - (temporary reduction in productivity, because of lower staff morale)

Research shows there is no long-term benefit of layoffs other than the short-term gain in cash flow. Layoffs are only beneficial if they are needed for survival of the company

[thehappypm]

Lower productivity is highly questionable.

I’ve really only seen layoffs boost productivity. Suddenly there is less overhead and fewer cooks-in-the-kitchen.

Morale hits are real, but tend to fade if people feel confident that they’ve survived another day.

[austinpena]

Can you link that research?

[notyourwork]

My vague recollection from an HR person was employees are 1.5x or 2.5x (something like that) their salary as a cost to the company. So $250k sounds about in the middle.

[MuffinFlavored]

What does laying off 600 people do to their net revenue/gross margins?

[ROTMetro]

Do Swedish companies pay a lot into health care? Can you recover the cost of the IT equipment already paid for since these are existing employees?

[napoleongl]

Health care is paid through taxes in Sweden and your access to it is not dependent on your employment. You can have a private insurance (and I assume a company like Spotify does) but it’s mostly for getting access to some private doctors offices with shorter queues to some things. We don’t really have privately run hospitals as the US.