Soundcloud, the online audio distribution platform based in Berlin, announced in a public blog post on their official website that staff cuts will be made this year as an attempt to increase profitability and ensure stability for the company. As stated by Tech Investor News, the company has lost over $150M from 2010 through 2015.
‘We need to ensure our path to long-term, independent success,’ says CEO Alex Ljung. ‘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.’
To avoid bankruptcy, as part of the reduction, Soundcloud company will close two of its offices, San Francisco and London, leaving only New York and Berlin operational for the moment. The streaming service will let go 173 of its 420 employees, cutting so over 40% of the staff. The CEO also stated that the company was suffering from a liquidity crisis even though its revenue doubled last year. However, in order to ‘be independent, cuts needed to be made.’
‘By reducing our cost and continuing our revenue growth, we’re on our path to profitability and in control of Soundcloud’s independent future,’ states Alex Ljung.