SoundCloud Closes Two Offices and Cuts 40% of Employees
In an effort to increase profitability and stay afloat in the music streaming landscape, SoundCloud has cut roughly 40% of its staff – 173 jobs out of a total of 420. The layoffs will consolidate employees into two offices, including their New York office and its main headquarters in Berlin. Both the San Francisco and London offices will close.
“By reducing our costs and continuing our revenue growth, we’re on our path to profitability and in control of SoundCloud’s independent future,” said SoundCloud co-founder, Alex Ljung.
Music streaming is big business, but with competitors like Apple and Amazon, as well as potentially high royalty rates, SoundCloud’s increasing revenue still can’t seem to compete with the overall costs. According to Bloomberg, streaming services have helped some of the world’s largest record labels see sustained sales growth, while the streaming companies themselves have struggled to make money. With Spotify, Pandora and SoundCloud all facing similar financial concerns, there may be greater issues on the horizon within the music industry.
SoundCloud promises that it will remain available in 190+ countries around the world. It currently has about 175 million listeners and plans to continue focusing on artists and creators as their unique industry advantage.
Ljung said in a formal note that he looks forward to sharing plans for the weeks and months ahead. Read the full note here.