[achiang]

You need to use the fully loaded cost of an employee when estimating opex savings, which includes health care costs, retirement funding, etc.

Rule of thumb is that fully loaded cost for US employees is approximately 2x yearly salary (although people who've actually run a company can correct my potentially stale or incorrect understanding).

[phamilton4]

Understand 2x, I was also looking across all the jobs at spotify. There are some that go as low as 70k salary, a majority seem to be 170k+. It was just for ease of calculation. even if we take 500k that's still 0.033% of revenue -_-

[DeRock]

You aren't using percentages correctly, I think you mean 3.3% (and 1% in your original comment). Also, as pointed elsewhere, revenue is not really relevant, majority of that cash flows directly to artists/labels.

[thehappypm]

Again, revenue is not really all that relevant for this kind of business. They’re a low margin business because they must pay huge bills to record labels. R&D doesn’t cut record label costs.

[CydeWeys]

2X is my understanding as well. Whatever you think an employee costs based on TC, double it to get the rough cost to the employer. Some other big employer costs related to employees you forgot include employment taxes, hardware/software expenses and licenses, and office space and related perks.

Also I suspect that $150k as the mean TC of those being let go is low. Spotify might be saving up to $500k all-in per employee let go.

[hello_moto]

> Whatever you think an employee costs based on TC, double it to get the rough cost to the employer.

Hardware/Software expenses, office spaces, health insurance are fixed cost.

$150k employee vs 200k employee will have the same amount of fixed cost (assuming both are in the same function).

[WastingMyTime89]

> Also I suspect that $150k as the mean TC of those being let go is low.

Probably not low. It's an enormous salary for a developer outside of the Valley and Spotify has plenty of employees which are not in the USA.