SoundCloud was one of the fastest growing music streaming platforms and most influential musicians released a lot of music on it. Now, it is shrinking, and faces a harsh future in the online music market. Closing offices in London and San Francisco, SoundCloud has reportedly laid off nearly half it’s workforce, letting go 40% of it’s staff. According to CEO Alexandra Ljung, this move will ensure its “long-term, independent success.”
“By reducing our costs and continuing our revenue growth, we’re on a our path to profitability and in control of SoundCloud’s independent future,” said Ljung in a blog post.
There has been speculation spreading throughout the music industry that SoundCloud might be for sale at a value lower than the $1 billion it has sought in the past. SoundCloud has become a streaming giant with 175 million regular users, making it one of the most popular music sites in the world, but it also faced pressure from record labels to sign licensing deals and develop a paid subscription model to compete with Spotify and Apple Music.
Executives feel that the lay-offs is part of a strategic plan to “cost cutting, continued growth of [their] existing advertising and subscription revenue streams, and a relentless focus on our unique competitive advantage – artists and creators.” Ljung revealed that 173 staffers were let go with those remaining shifted into the Berlin and New York offices. There have been serious and widely reported problems including losses verging on $100 million from 2014 to 2015, but SoundCloud executives claim they have a “strong outlook for 2017.”
“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,” said Ljung. “Without them, we would not be where we are today. [SoundCloud will] continue to be the place for what’s new, now and next in music.”