Maybe Spotify shouldn't have let the Wrapped guy go

Spotify's "soulless" Wrapped 2024 release shows that employees aren't interchangeable or swappable with AI (even if you really want them to be).

Engineers can be classified a few different ways for staffing purposes. One way is by their leveling. Another way is their area of expertise. That’s why job postings always lead with this information and the office location, like “Senior frontend engineer, NY/hybrid.”

Let’s look at experience first. A motivated industry veteran will usually outperform a new college grad. So they get paid differently and have different expectations. Companies usually define their different individual contributor levels in a “career ladder” that spans from intern to some title like “senior principal engineer.”

Now let’s talk disciplines. A modern consumer-facing website or app might have engineers specializing in backend, platform, web, mobile, machine learning, data scientists, etc. To get everyone to play nicely, they bolt these engineers onto a management chain and project teams and then everyone’s off to the races.

Executives play a multi-objective optimization game. At each fractal level of the company (team, group, division, company), you’re determining what disciplines you need, how many people of each level you need, where you need them, and how much it costs to pay all of them.

If you need more employees of some flavor — “we need more staff and senior machine learning engineers to build out our vision of AI” — then you’ll typically hire more [0]. You also have many options to reduce staffing for a project, ranging from “you’re going to work on this other thing” to “security will escort you out.”

In this top-down worldview, employees become trivially replaceable. You just need to hire a new level/domain engineer and give them some number of months to get up to speed.

But the top-down view of your organization isn’t the only perspective. An individual contributor ncessarily has a bottom-up view. You recognize that employees have expertise that can’t possibly be captured by “Senior frontend engineer, NY/Hybrid.” People work on systems for years and become experts within their scope. For any specialist system in your company, there are usually some vanishingly small number of engineers that you can unconditionally trust to modify it.

Right now, someone somewhere is typing “let’s add alice to this design doc review” because your project sends an email and Alice got stuck on that project 5 years ago that required her to basically rewrite the whole email stack, so she is the only person in the company who regularly stops people from making obvious mistakes like sending integration test emails as real emails.

Let’s talk about Spotify. In December of 2023, they decided that they had hired too many people during 2020 and 2021, and laid off 17% of the company.

In an email to the company, CEO Daniel Ek states:

https://newsroom.spotify.com/2023-12-04/an-update-on-december-2023-organizational-changes/

To be blunt, many smart, talented and hard-working people will be departing us.

[…]

I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance. We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives. While I am convinced this is the right action for our company, I also understand it will be incredibly painful for our team.

In the Q1 earnings report the following April, Ek notes that the staff departures affected day-to-day operations even more than he expected.

https://seekingalpha.com/article/4685308-spotify-technology-s-spot-q1-2024-earnings-call-transcript

Another significant challenge was the impact of our December workforce reduction. Although there's no question that it was the right strategic decision, it did disrupt our day-to-day operations more than we anticipate. It took us some time to find our footing, but more than four months into this transition, I think we're back on track. I expect to continue improving on our execution throughout the year, getting us to an even better place than we've ever been.

And that leads us to the release of Spotify Wrapped. Wrapped is a yearly end-of-year marketing page that Spotify generates for each user. It uses quirky animations — imagine a psychedelic sandwich pops into layers and becomes a list of data describing your behavior—, clever writing, and bold colors to give you a one-of-a-kind celebration of YOU. It feels personal and fun to show everyone that you’re an “Alchemist” and your Sound Town was Waterloo, Canada, and you are in the top 1% of listeners to that song you mainlined for 3 months. It was truly a weird work of art that only Spotify could produce.

This year, they released a revamped Spotify Wrapped that the NYTimes said “fell flat” and contained “word salad.” The NYTimes didn’t even wait for the main text; that’s just what’s in the title and subtitle. And people on my Bluesky feed were throwing around words like “soulless” and accusing them of doing the “bare minimum”.

From watching some YouTube videos of some Spotify Wrappeds from 2023 and 2024, the difference is obvious. In 2023 the animations were quirky and themed. In 2024 they have curtains and simple swirls that look like they could have come from a stock animation site. The 2023 Wrapped was just much more extensive than 2024. In 2023 the AI-generated clusters were still clearly labeled by human writers that were having fun. In 2024 they looked like they were vomit from an LLM processing the per-user embeddings, spewing random words like “Pink pilates princess strut pop.”

Reading through a bunch of Reddit threads, a theme emerged. They report that Spotify laid off the employee that was propping up Spotify Wrapped with his work.

Why Spotify wrapped sucks this year, comment by u/Phlysher

Read his book "You haven't heard your favorite song yet" that he released after being fired. You learn a lot about Spotify and how things worked there. He had founded a music analytics sub company that was bought by Spotify. His title was "Data Alchemist" because he specifically developed data driven experimental application that would then make it into features. He was indeed one of those genius one in a million roles that worked as an incubator to come up with innovative cool stuff.

The employee in question, Glenn McDonald, basically confirms this himself.

The top-down and bottom-up views of this layoff are much different. From the top-down, when you lay off Alice (our email hero from above), you just note that there is now one fewer staff engineers in the organization. You anticipate that the organization will slow down at first, but will heal around the wound.

But when you have the bottom-up perspective, you’re going to see weird things like “we’re hiring an email consultant because our emails are ending up in spam” and “our emails look bad in Outlook, does anyone have a Windows laptop?” and you’ll just rage at the injustice of having laid Alice off.

From the top down, you’ve changed the shape of all of your buckets and you’re going to see how the new organization performs and move on from there. From the bottom up, you see that part of the true soul of the company was thrown away for nothing.

The top-down and bottom-up views are obviously different on Spotify. From the top-down view, you say “What is a Data Alchemist and we’re paying him HOW MUCH? Of course we laid them off. We could just hire a Staff Data Scientist (Stockholm/hybrid) for much cheaper!” From the bottom-up view, you say “of course it sucks, they replaced artists with a robot and people noticed that they were robbed of the emotional release we’ve given them for years”

Between the layoffs and demonetizing all tracks with under 1000 streams, Spotify’s stock is up 150% and is making a profit when it was losing money last year. But given that the music streaming services and podcast streaming apps are close to being commodities, it’s surprising to watch them throw away a true unique competitive advantage that many tried to imitate and nobody came close to replicating. But of course, I have the bottom-up perspective!

[0] Promotions exist too, but aren’t important for the purpose of this piece.