SoundCloud recently announced it is cutting 173 jobs or 40 percent of its staff in a push for profitability. In a note on the company’s blog, SoundCloud co-founder and CEO Alexander Ljung explained the move to cut staff was necessary to ensure the digital music service’s path to long-term, independent success.
“And in order to do this [ensure SoundCloud’s path to long-term, independent success], 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,” wrote Ljung in the post.
SoundCloud Cost Cutting for Continued Growth
Small business owners and entrepreneurs have used SoundCloud as an audio-based social networking service, uploading and setting their audio content to automatically tie into an RSS feed and iTunes. Others embed SoundCloud audio files onto Web pages or blogs. And listeners can leave comments at specific points in the file.
At Small Business Trends, Brent Leary uses SoundCloud for his interview series. However, the digital music service, a favorite with podcasters and musical entrepreneurs, has struggled with profitability. The company reportedly lost a total of $70.3 million in earnings in 2013 and 2014 combined. And in January 2017, Ljung said the company was at risk of running out of money.
Recently announced job cuts, substantial for the company, are meant to mitigate further revenue loses. Ljung pointed out in his note on the company blog the recent job cuts will not impact the services the platform offers.
SoundCloud Services Not Impacted
“The SoundCloud platform listeners and artists love will remain available in more than 190 countries globally,” reassured Ljung. “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.”
This means musical entrepreneurs, podcasters and others who create original audio will still be able to upload their files and share their content with the broader SoundCloud community.
SoundCloud said the remaining staff members will now be consolidated into only two offices: its headquarters in Berlin and New York. It is closing its offices in London and San Francisco.
SoundCloud Photo via Shutterstock
But does that mean that it is not really making any money? Spotify have a similar issue. It is hardly making any money.
It seems so, Aira. SoundCloud is not making good money, hence the need for these cost cutting measures.