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Comment by ctvo | Hacker News Reader

A single engineer is 400k in total costs, and they hired thousands for initiatives that didn’t pan out. Thinking cloud costs come anywhere close to being a factor here is nonsense and not supported by anything in the article.

You extrapolated that costs meant cloud costs vs. them overhiring during the pandemic and investing in things like podcasts, which haven’t had the expected returns. You did this in an attempt to tie this back to some injustice that happened to you in a comment section far far away, which you’ve edited the post to remove now, thankfully.

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Five things wrong

1. I didn't edit my comment to remove anything like that, so I'm not sure what you're suggesting.

2. I didn't perceive injustice, I thought it was a bit brainless to not associate company costs with long term survivability.

3. An engineer being 400k TC is an anomaly, Spotify does not pay any of it's Swedish engineering force nearly that much, and since we don't know the demographics of the layoffs it's hard to argue engineers anyway. (Citation here says the avg was 125.000[0] which is still very high if these were europeans)

4. Their cloud bill would still be roughly 500 people based on that TC based on committed use alone.

5. Costs = Costs. Overspending in many areas = no more money. I'm merely suggesting that they overspent in one area that is now affecting another area indirectly. Yes, I drew a line.

[0]: https://news.ycombinator.com/item?id=38516794

> 3. An engineer being 400k TC is an anomaly, Spotify does not pay any of it's Swedish engineering force nearly that much, and since we don't know the demographics of the layoffs it's hard to argue engineers anyway. (Citation here says the avg was 125.000[0] which is still very high if these were europeans)

Are we going to ignore that on average their US engineers costs significantly more than ~400K total costs and they have an engineering hub in New York City?

> 4. Their cloud bill would still be roughly 500 people based on that TC based on committed use alone.

And they paid Meghan and Harry 20,000,000 USD for a podcast deal that didn't work out. That's 50 engineers. Should we look at the Rogan deal too and go through everything that didn't work out in the last 3 years?

You've provided no evidence that by not using the cloud Spotify would have made more money or prevented these layoffs. And costs is one thing: Could they have grown as quickly? Scaled as fast? Hired as easily? Without numbers, which you won't share (outside of "trust me I've seen it"), this becomes even harder to debate.

> Are we going to ignore that on average their US engineers costs significantly more than ~400K total costs and they have an engineering hub in New York City?

Yes, because you're asserting that:

A) That engineers who have been laid off have that TC.

B) That it's engineers we're talking about.

C) That it's mostly localised in NYC; a high CoL city by all metrics.

Their other spending is also shameful, it doesn't discredit other poor spending.

You're a little bit upset with me for some reason, I would surmise that you're feeling somewhat defensive, maybe you work for a cloud or you've skilled entirely into only being able to work with cloud. That's fine, but you need to understand financial constraints in business.

This is the side of business I am most knowledgeable about so I am qualified to have an opinion; situations like Harry and Meghan? Rogan? Not my area at all and it would be impossibly arrogant of me to assume I know anything at all about those situations.

Also: "trust me bro" is not my position, the way I saw the numbers is a grey area legally and I'm not sure any Spotify people want to chime in to clear it up because it's likely one thing that is under tight NDA.

Here's some very old info though that'll help you realise that the order of magnitude is there: https://www.cnbc.com/2018/03/20/spotify-will-spend-nearly-45...

> Citation here says the avg was 125.000[0]

My comment you are referring to.

For the record, I used Glass Door, checked mostly Stockholm, but Paris, Barcelona, and Helsinki all seems to be in a similar range.

which lists most roles (including managers and senior engineers) as making less than SEK 1M ($98k) per year, most in the $75-$87k range it seems. Add on office space and equipment and other costs of roughly $30k per year and you got something like the above number.

understandable, FWIW since I have numbers on these things from working in multiple companies it might be nice to map out where those extras actually go for other readers:

$500/mo for seat licensing (for developers) this includes: Git hosting/Copilot/Office Suit/IDE's/Figma/Slack etc;

$500-$1500/mo for office space (depends a lot, in my company a seat costs me $500/mo and I'm in the middle of the city- larger companies may pay even less but lets assume a very high cost since it's a tech company).

$50/m for preventative healthcare (friskvard in sweden; this is actually higher than the maximum tax-free value)

$100/m for non-preventative health insurance (IE; private healthcare)

$120~/m amortised cost of laptops (assuming $4000 macbook over 3 years and a screen amortised over 5)

5% monthly salary for pension, so, that varies a lot.

But it roughly aligns with your $30k p.a

Payroll tax is missing from this listing - for Sweden this is 31.42% in the normal case.

No, payroll tax is always included in salary numbers because the tax is _drawn_ from the salary, not added on top of it. In Sweden they always use gross numbers for salaries.

Yes, we use gross numbers for salaries but the gross salary value does not include social contributions, payroll taxes/fees paid directly to the government, the gross amount is just before income taxes. There are quite a few extras on top of the gross advertised salary which the company pays for and we employees don't even know about (it's not shown in payslips).

Given that the Glass Door numbers are the gross value including reimbursements and taxes… What exactly is your point here?

Glassdoor numbers will be gross of income tax, but not include employer social security contributions, which is 31.24% on top of what you see as listed gross salaries. That is his point.

Don't forget if you're doing back-of-the-envelope stuff that there is also 20.6% corporate tax on revenue that has originated in Sweden. And companies resident in Sweden are taxed on their worldwide income, although if they are taxed elsewhere then this elsewhere amount can be deducted. But this means you are paying at least that amount. I imagine some chunk of Spotify's workforce exists to optimise and figure out all of that, given the number of legislatures and tax environments they have subscribers in.

My point is that Swedish employees who input data into Glassdoor will have no idea about the extra social contributions, work insurances, and taxes paid by the employer that aren't available in your payslip. A payslip here only includes the gross salary without those add-ons, and so you aren't aware that your employer is paying some 50-70% on top of the gross salary you see in the payslip.

Maybe I've misunderstood what the parent comment meant so correct me if I'm wrong.

Payroll tax is paid by the employer, as opposed to income tax which is paid by the employee. Anyone disclosing their salary in Sweden will give their pre-income tax salary, payroll tax not included.

Don't forget they have offices in India and South America. Exchange rate is 1 US dev to 2-5 Indian dev (depends on seniority level).

The cost of an employee is significantly more than their TC. It's a function of many resources, including compensation, hardware, space (real estate), corporate services, software licenses, taxes, etc.

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