Soundcloud, a music streaming platform has announced that they will be cutting costs to free up cash flow and stay flexible. Operations will be downsized as they shrink their 4200 person workforce by 173 staffers.
Offices in London and San Francisco will turn their lights off, leaving only the New York and Berlin offices.
Net Losses have accelerated. In 2015, revenues were reportedly up 21.6% to $22m, net losses also drove up 30.9% to $52m. No further financial accounts have been made available.
There is speculation that Soundcloud may be positioning for an exit to the arms of streaming service, Deezer, of Access Industries.
In a blog post on Soundcloud, where the statement of layoffs and downsizing was first posted by Alexander Ljung, he states their revenue is up, yet leaves losses to the imagination.
SEE FULL STATEMENT:
Eric and I founded SoundCloud nearly 10 years ago as we saw a need for something that would enable artists to share and connect through music. As we hovered together back in 2008 to push the button that would make SoundCloud live for the entire world, we had no idea the impact our, then tiny, the platform would have on the future of music culture, and millions of listeners and artists around the globe.
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.
With more focus and a need to think about the long term, comes tough decisions. Today, after careful and painful consideration, we took the difficult step to let go of 173 SoundCloud staffers and consolidated the team into two offices: Berlin and New York. We are extremely grateful for the contributions of each and every staff member who will be leaving SoundCloud, and we wish all of them the best. Without them, we would not be where we are today.
By reducing our costs and continuing our revenue growth, we’re on our path to profitability and in control of SoundCloud’s independent future.
So what does this mean for SoundCloud? The SoundCloud platform listeners and artists love will remain available in more than 190 countries globally. SoundCloud will continue to be the place for what’s new, now and next in music, powered by the world’s most diverse music community. I look forward to sharing more about our future plans in the weeks and months ahead.
July 6, 2017
Senior Executives have fled the sinking ship.
Chief Content Officer, Stephan Bryan made his departure in May to move to YouTube.
Earlier in the year, Soundcloud Chief Operating Officer, Marc Strigel and Finance Director Markus Hardel had said their goodbyes to their team.
Niel Miller, General Counsel has also parted ways with the ailing company.