July 13, 2017:SoundCloud CEO: ‘We decided we would take more control’

Last year, campaigners for the UK to leave the European Union urged voters to “take back control” – although ever since a narrow majority of Brits voted to do exactly that by backing ‘Brexit’, the process has looked more a story of chaos and mismanagement than the promised control.

Let’s hope that’s not an omen for SoundCloud, whose CEO Alexander Ljung said yesterday that the company’s 173 layoffs represent “taking back control” of its destiny, after months of speculation about its financial health.

Ljung was speaking at the Tech Open Air Berlin conference, where he maintained that SoundCloud was “doing what we can to support” the laid off staff while trying to plot a positive path forward.

“We doubled revenues in the last 12 months. We decided we would take more control,” he said, according to TechCrunch. “We laid off 173 people, that’s a considerable cost-saving, consolidated offices, our users are going up, revenues are doubling and the reason for this is we’re taking more control of our own future, creating a path to profitability and ensuring our independence at SoundCloud.”

Ljung also confirmed that “we are fundraising at this point”; batted back questions about an acquisition: “We are building an independent SoundCloud, which is completely unique. You can can find artists there that don’t exist anywhere else. Many are the next ones to accept Grammys. There is tremendous financial and cultural impact on SoundCloud. It will stay strong.”

That sounds positive, but shortly after posting its report of the Tech Open Air session, TechCrunch published another piece putting a different complexion on matters, based on leaks from a “tense” all-hands meeting at SoundCloud.

“Founders Alex Ljung and Eric Wahlforss confessed the layoffs only saved the company enough money to have runway ‘until Q4’ — which begins in just 50 days,” claimed the report. SoundCloud’s spokesperson responded to that claim with the confirmation that “We are fully funded into Q4”.

From employee anger at the lack of warning over the layoffs to speculation about SoundCloud’s user figures, the article will not make for easy reading within the company’s leadership and investors.

Labels, meanwhile, will be keen to gauge the accuracy of the claim that SoundCloud is planning to refocus away from the major-label music added as part of its Go premium tier launch – “The plan is to concentrate on the content where they don’t have to pay our part of the money to the labels,” as one source put it.

Quite apart from the financial challenges, such a strategy would be a recipe for further rocky moments ahead.

Stuart Dredge
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