SoundCloud has started the process of reducing its global workforce by approximately 20%.
SoundCloud CEO, Michael Weissman, referenced the news on LinkedIn today (August 3), adding: “Making changes that affect people is incredibly hard. But it is one that is necessary to ensure SoundCloud’s long-term success given the challenging economic climate and financial market headwinds.
“For those impacted by this decision, I want to thank you personally for your passion and contributions to SoundCloud and the artist communities we serve. You have all made an incredible impact on the music industry and on artists’ lives.”
SoundCloud has confirmed that approximately a fifth of its global workforce will leave the business as a result.
The news follows a wider trend of layoffs being made in the tech sector this summer.
Crunchbase estimates that 32,000 workers in the US-based tech sector alone have been laid off so far in 2022.
Software giant Oracle, for example, was recently reported to be considering cutting thousands of jobs worldwide as part of a $1 billion expense-cutting exercise.
Meanwhile, ByteDance-owned short-form video streaming platform TikTok was reported last month to have started laying off some of its staff in the US, and preparing to cut workers in Europe.
Now, it’s SoundCloud’s turn.
As of the end of 2020, the music streaming company reported having 392 employees worldwide (359 of them full-time).
SoundCloud posted revenues of EUR €193.5 million (USD $218.7m) in calendar 2020, up 31% year-on-year.
That’s according to the FY 2020 fiscal report for SoundCloud Holdings GmbH – the most recent year for which the company has filed public accounts.
SoundCloud’s annual operating losses substantially narrowed in 2020 by 41% YoY to €15.4m ($17.4m).
SoundCloud said of its performance in 2020 that “total revenue exceeded expectations and our operating losses were lower than initially planned”.
This isn’t the first time that SoundCloud has made widespread redundancies at its company: In 2017, the firm laid off 173 employees amongst its global workforce, which then numbered 420 people.
Following that move, SoundCloud was majority-acquired by The Raine Group and Temasek in a $170 million deal that same year – an agreement which brought now-CEO Michael Weissman into the company.
In 2020, SoundCloud accepted a $75 million investment from SiriusXM (parent of Pandora).
Last month, SoundCloud announced a pioneering new licensing deal with Warner Music Group (WMG), which will see the latter company adopt/accept a user-centric (or ‘Fan-Powered’) royalty payout model from SoundCloud for all of its artists going forward.Music Business Worldwide
