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SoundCloud Lays Off 40 Percent of Staff, Commits to ‘Independent Future’

SoundCloud laid off 173 staffers, or approximately 40 percent of its workforce, and consolidated its operations into offices in Berlin, where the streaming service is headquartered, and New York, closing its London outpost. The move comes amid high-level departures — COO Marc Strigel, finance director Markus Harder and CCO Stephen Bryan have all left the company in the past five months — and swirling acquisition rumors, with the New York Post reporting this week that Apple and Deezer were the latest companies to explore bids to purchase the company.

In a statement on SoundCloud's blog announcing the move, co-founder and CEO Alex Ljung wrote that the layoffs were due to a long-term desire to achieve profitability through cost reduction and revenue growth, in order to be "in control of SoundCloud's independent future." Noting that the company had "more than doubled" its revenue in the past year, Ljung continued that the company needed to engage in "cost cutting, continued growth of our existing advertising and subscription revenue streams, and a relentless focus on our unique competitive advantage — artists and creators."

In March, SoundCloud secured $70 million in a new funding round, which the company said at the time would "enable SoundCloud to strategically grow our technology and personnel resources to fuel our expected 2.5 times year-over-year growth in 2017." Last year, SoundCloud introduced SoundCloud Go, a fully-licensed subscription streaming service priced at $9.99/month — which has subsequently been rebranded SoundCloud Go+ — and this February unveiled a mid-tier, $4.99/month option, which allows users ad-free offline play.

Yet the company, despite its insistence on its own independence, has repeatedly and relentlessly been linked with acquisition rumors. Last year, market leader Spotify was the heavily-favored frontrunner, but reportedly ended its interest in December. A rep for the company declined to comment on recent reports about a possible sale, saying it does not comment on rumors or speculation as a matter of policy.


Read Ljung's full statement here, and below.

Eric [Wahlforss] 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, 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.