Amid renewed rumours that SoundCloud is about to be acquired, the company has announced that it is laying off 173 of its staff, while consolidating its offices down to Berlin and New York.
CEO Alexander Ljung announced the news in a blog post. “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,” he wrote.
“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.”
Ljung added that “by reducing our costs and continuing our revenue growth, we’re on our path to profitability and in control of SoundCloud’s independent future”. The latter seemingly a reference to the acquisition rumours, which this month have seen Deezer touted as a frontrunner to buy the company.
According to its last financial report, SoundCloud ended 2015 with 295 employees across its Berlin, London, San Francisco and New York offices. While the company has not provided an update on that number since, today’s 173 layoffs clearly represent a significant percentage of its workforce.
SoundCloud announced a $70m debt-funding round in March 2017, shortly after publicly criticising the Financial Times over a report that had claimed the company was “begging for money” from potential investors.
SoundCloud published its financials for 2015 in January this year, revealing that its revenues grew by 21.6% to €21.1m that year, but that its losses grew faster – by 30.9% to €51.2m. Those financials revealed that in 2015, the company spent more on salaries (€26.8m) than it earned in revenues.