SoundCloud to Lay Off Roughly 20% of Staff
SoundCloud’s bumpy road to solvency will soon take it back through bleak territory. The company will let go of approximately 20% of its global workforce as part of “a significant company transformation.”
Billboard reports that SoundCloud CEO Michael Weissman broke the news to employees in a memo sent out via email. “Making changes that affect people is incredibly hard,” he wrote. “But it is one that is necessary given the challenging economic climate and financial market headwinds.”
There is a bright side, according to Weissman. He claims that in tandem with other financial decisions made by the company, the layoffs will put the music streaming platform “on a path to sustained profitability.”
A representative confirmed the decision in a statement. “During this difficult time, we are focused on providing the support and resources to those transitioning while reinforcing our commitment to executing our mission to lead what’s next in music,” they wrote.
Streaming Struggle
SoundCloud was founded in Germany in 2007 by Alex Ljung and Eric Wahlforss. Its lower barriers of entry for content creators differentiated it from then-new streaming services like Pandora and Spotify; anyone can create an account and upload audio to the site.
Monetizing this model through subscriptions and advertising proved difficult. By the time Ljung stepped down as CEO in 2017, Axios reported that the company had raised over $230 million to remain afloat — yet still laid off 40% of its staff. During Kerry Trainor’s tenure as CEO, the service expanded on its subscription model and introduced DJ gear integrations, among other things.
In February, Music Business Worldwide reported that the company’s year-over-year revenues increased by 31% to almost $219 million in 2020. Its losses, meanwhile, had decreased by 41% to only $17.4 million. While it’s not yet in the black, the company has maintained a positive trajectory since The Raine Group and Temasek Holdings acquired a dominant share of it in 2017.
In the fiscal year ending in 2020, SoundCloud reported having 392 employees, 359 of whom worked for the company full time.
