SoundCloud Layoffs Leave Future Of Service Unclear

The internet's biggest user-generated streaming service is facing some tough cuts, but can it survive?

Back up your stuff, because the internet’s premier source of unofficial remixes, bedroom recordings and basement DJ sets might be going under.

In a blog post last week, SoundCloud co-founder Alex Ljung announced the decision to lay off 173 staff members—40% of their current workforce—and consolidate their operations to just two offices: one in New York and one in Berlin. The decision comes a little over a year after the company rolled out their new paid subscription services, Soundcloud Go and SoundCloud Go+, in an attempt to keep up with the titans of the streaming industry, Spotify and Apple Music.

Though Ljung’s remarks in the post imply some kind of future for the company, a new report by TechCrunch begs to differ. The report allegedly uses leaked info from an “all-hands” global conference meeting with SoundCloud staffers to confirm that the layoffs “only saved the company enough money to have runway until Q4,” a date less than 80 days away.

The article goes on to allege that user numbers have been dwindling over recent years, and that staff morale is at an all-time low. Employees state that when team members join, they receive company swag, headphones and brand new Apple laptops. One employee expresses confusion as to how the company was “blowing through money, but now [they’re] saying they don’t have any money. People would have made sacrifices, to be honest. It’s a fun company to work at, but there was no indication.”

SoundCloud shared a statement refuting the accuracy of TechCrunch’s reporting. Here it is, in full, via Variety:

There are a number of inaccuracies within the TechCrunch article. They seem to stem from a misinterpretation of information by one or two laid off employees during a recent all hands meeting. Due to the extensive number of inaccuracies, we will only comment regarding funding and layoffs. To clarify, SoundCloud is fully funded into the fourth quarter. We continue to be confident the changes made last week put us on our path to profitability and ensure SoundCloud’s long-term viability. In terms of layoffs, it is our policy not to discuss individual employee cases, but we can share we continue to work with all employees who were let go to support them during this transition, with employment and financial assistance.

TechCrunch responded to the statement, asserting that they stand by their reporting.

The whole thing is treading in pretty murky water. Right now, it’s TechCrunch’s word against SoundCloud, and the only way we’ll find out who’s telling the truth is with time. SoundCloud is the worlds largest user-generated streaming platform, and without it, no one can really say what the future of online music looks like. So back up your projects, because the internet’s premier amateur musician safe haven might not exist in a few months.

What do you think of SoundCloud’s current situation? How do you think it’ll affect our streaming in the next few months? Share your thoughts in the comment section below.

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