Morale is low at SoundCloud amid rumors of a potential shutdown.
Here are nine things that were revealed in recent days:
- The music streaming service cut 40% of its workforce without a warning, causing 173 employees to lose their job.
- SoundCloud had a meeting for the entire company staff that took place in its Berlin headquarters to address the company’s current state.
- Company sources told TechCrunch that founders Alex Ljung and Eric Wahlforss ordered the abrupt round of layoffs to save enough money to keep the company afloat until its fourth quarter, which kicks off in less than three months.
- “With more focus and a need to think about the long term, comes tough decisions,” Ljung said in a public statement, contradicting rumors.
- He added that cutting costs and continuing SoundCloud’s revenue growth will help the service reach profitability as an independent entity.
- The company told TechCrunch that it is fully funded through the fourth quarter, but it is also in talks with potential investors.
- Ljung admitted in the meeting that remaining independent remains a challenge for the music streaming provider as some of its artists are not backed by a label and the company has struggled to capitalize financially on their tunes.
- Some of the positions that SoundCloud eliminated involved workers who were hired recently, prompting them to quit their previous jobs, sell their homes and relocate to Berlin.
- As recently as three years ago, the company had 175 million active monthly users. SoundCloud hasn’t updated this figure in a while, and analysts believe it to be as low as 70 million users today.
Perhaps shifting towards a subscription service with a monthly fee is what the company needs to do to survive, but it would go against its identity of allowing anyone to upload original music, remixes or playlists.