DIY music veteran SoundCloud flounders, lays off 40% of staff

SoundCloud To Cut 40% of Its Staff As It Continues To Struggle

Two SoundCloud employees said the announcement came as a shock, adding that they hadn't anticipated anything like this happening in the near future.

For SoundCloud, a brand that had its COO Marc Strigel, finance director Markus Harder and CCO Stephen Bryan leave within the last five months, this appears to have been a long time coming, with signs of trouble circling the brand for at least the a year ago.

"By reducing our costs and continuing our revenue growth, we're on our path to profitability and in control of SoundCloud's independent future", he wrote. "Nobody saw it coming".

The same employee said that other employees only know as much as was made available to members of the media. "We do not actually know what is going on or what the next steps will be".

SoundCloud bagged $2.5m of Series A funding from Doughty Hanson Technology Ventures in 2009; raised $10m Series B investment from Union Square Ventures in 2010; and took in $60m in 2014.

Talks failed both with Twitter and streaming leader Spotify to acquire and incorporate the site. However, a report from Recode published in March suggested that SoundCloud was considering offers in excess of $250 million (£200 million).

In January, SoundCloud said it was at risk of running out of money this year, especially if its subscription service continued to struggle. However, it incurred a 51 million Euro loss in 2015 on revenue of 21.1 million Euros. SoundCloud started out as a free streaming service in 2007, which helped make it popular among new artists.

Soundcloud Ltd.is cutting about 40 percent of its staff in a cost-cutting move the digital music service says will give it a better financial footing to compete against larger rivals Spotify Ltd. and Apple Inc.

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