SoundCloud workforce to be hit hard by office closures and job losses.
In a move to stay viable, audio discovery and sharing platform SoundCloud is to cut 173 jobs, or 40pc of its workforce.
The company is closing its London and San Francisco offices, leaving only Berlin and New York operational.
‘Today, after careful and painful consideration, we took the difficult step to let go of 173 SoundCloud staffers, and consolidated the team into two offices: Berlin and New York’
– ALEX LJUNG
CEO and co-founder Alex Ljung said the cost-cutting measures were necessary “to ensure our path to long-term, independent success”.
Last year, the company warned that it may run out of cash.
Acquisition talks with both Twitter and Spotify came to nothing, and it emerged that SoundCloud raised $70m in debt financing in March, which was geared to put the company on the right footing.
However, the strategy appears to have gone awry.
SoundCloud previously raised $100m in June 2016 in a round that included Twitter Ventures. Other investors include Universal, Sony and Warner Music as well as VC firms GGV, Index, IVP and KPCB.
SoundCloud is a platform for musicians and podcasters who want to share audio across devices, websites and social media platforms, and achieve maximum impact. Globally, it has more than 175m monthly listeners.
Sound designer Alex Ljung and artist Eric Wahlforss founded the Berlin-headquartered company in 2007.
In a blog post, Ljung explained the rationale for the cuts: “In the competitive world of music streaming, we’ve spent the last several years growing our business, and more than doubled our revenue in the last 12 months alone. However, we need to ensure our path to long-term, independent success. And, in order to do this, it requires cost-cutting, continued growth of our existing advertising and subscription revenue streams, and a relentless focus on our unique competitive advantage: artists and creators.
“With more focus and a need to think about the long term, comes tough decisions. Today, after careful and painful consideration, we took the difficult step to let go of 173 SoundCloud staffers, and consolidated the team into two offices: Berlin and New York. We are extremely grateful for the contributions of each and every staff member who will be leaving SoundCloud, and we wish all of them the best. Without them, we would not be where we are today.
“By reducing our costs and continuing our revenue growth, we’re on our path to profitability and in control of SoundCloud’s independent future,” Ljung said.