“Ek said that the company had debated making smaller cuts during the next two years but ultimately decided on a “substantial action” to get costs in line.”

This is the right move. You don’t want future layoffs hanging over the heads of employees. It kills morale.

Go big enough so that it’s meaningful (rarely a 5% cuts move the needle), and move on.

We need details how the strategy is solving. You can’t cut 1/6 of employees from just G&A. It has to come R&D too. While I believe that Sales & Marketing at $SPOT is bloated.

As an example: formers have told us about multiple billboards in Nashville. “They already won, they don’t need to do this anymore.”

But I think the real opportunity is in R&D. $SPOT is going to spend about $2bn this year. HUGE! Much more than $NFLX when it was of similar scale and much more than many semiconductor companies. For reference $ASML spend about $3bn.

$SPOT has also always promised to grow R&D substantially from these levels. As much as I love the service, I don’t see where all that the money is going.

Moreover, I have repeatedly asked management to outline this investment
in more details and never got a satisfying answer.

Cc: @eldsjal

Quality is in vogue, & I have some thoughts on industry structure. How often have you heard:
“This is a rational industry with an oligopolistic structure”
Or
“The industry is fragmented, leaving potential for share gain.

So consolidate = good
&
Fragmented = good

Strange, no? How can both be true?

Further, occasionally, you hear companies blame irrational competitors. And the inference is more conpetitors = more competition = bad.

So it seems like all industry structures can be framed in a positive light until they aren’t.