June 14, 2024

Soundcloud is laying off a fifth of its employees

Soundcloud is laying off a fifth of its employees

After much hype, Berlin’s music streaming service has been quiet for a long time. Despite the profits made in previous years, a large part of the workforce is now forced to leave.

Image Alliance / ZUMAPRESS.com | Rafael Henrique

For a long time, it was relatively quiet around the Berlin-based music startup Soundcloud – which already had an eventful history behind it, eventually leading to the founders’ departure. Now the indie music streaming service, founded in 2007 by Alex Ljung and Eric Wahlforss, is attracting attention with bad news: Due to “the difficult economic climate and headwinds in financial markets,” as many as 20 percent of employees in CEO Michael Weissman’s books in a voice High: The United States must be dispensed with and Britain must be separated painting In an email to employees.

According to Linkedin, about 1,700 people have worked for the music startup so far, but no official information has been provided. Soundcloud was last downed drastically in 2017, when about 40 percent of jobs were cut, as reported by the startup scene. The background at that time was financial difficulties: the company relied too much on venture capital and rapid growth – when profits did not increase as quickly as employee costs, investors became skeptical.

Profitable since 2020

However, Soundcloud has been able to use the five years since then to better improve its financial position. As a result, the first profitable quarter in the company’s history was reported in 2020. At the same time, SiriusXM, the parent company of the American music streaming service Pandora, invested $75 million in the Berlin startup. In 2021, Soundcloud introduced a new compensation system designed to bring higher payouts to independent artists. And just a few weeks ago, Soundcloud acquired the startup Musiio, whose technology is supposed to allow users to discover titles of lesser-known artists according to their own preferences.

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According to their own statements, Soundcloud currently plays about 300 million different tracks from a total of 30 million artists. The offer is available in 190 countries around the world. The company had forecast sales of $300 million for the current year. Soundcloud does not provide any information on how this value will change in light of the current layoffs.