Things have seemingly gone from bad to worse for SoundCloud, the Berlin-based music streaming and podcast hosting provider. We brought you the recent news that SoundCloud would be deferring salary reviews for employees. It turns out “deferring salary reviews” was actually secret code for “about to lay off 40% of our staff and close some offices:”
The German-born streaming company has informed its staff today that 173 jobs are being cut, from a total headcount of 420.
The business will consolidate its operation across its New York and Berlin offices.
This consolidation will also close SoundCloud offices in San Francisco and London. A statement from SoundCloud cofounder Alexander Ljung acknowledged that choosing to lay off employees was a difficult decision, but it is part of SoundCloud’s plan to try and keep the company solvent:
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. 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.
Another report that surfaced in the wake of SoundCloud’s layoffs claims that the company only has enough money to operate until the beginning of the fourth quarter of 2017. If this is true, the company has a few months left before it may need to shut down completely.
If there’s any light at the end of SoundCloud’s tunnel, it comes from rumors that France-based music streaming service Deezer might buy SoundCloud. While Deezer does seem like a good match for the music side of SoundCloud’s business, Deezer didn’t do any favors for Stitcher after that acquisition (Deezer later sold Stitcher to Scripps/Midroll). Either way, the future looks very bleak for SoundCloud as a podcasting platform.