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Berlin-based music and audio platform SoundCloud has confirmed that it has begun the process of reducing its workforce by approximately 20%.
In a LinkedIn post, SoundCloud CEO Michael Weissman said, “It’s incredibly hard to make a difference to people. But given the challenging economic climate and financial market headwinds, it’s important to ensure SoundCloud’s long-term success.
Love them or hate them (honestly, who hates SoundCloud?), the company hasn’t always had it easy. And that’s a fairly clear statement for the entire music, and video, industry to operate on the Internet. The old guard of licensing has been a stumbling block for many, and such was the case with SoundCloud in 2014.
Gaining users and popularity at 40 million, with 20 million more coming on board per month, all seem to be on the up and up. No longer able to ignore the elephant in the room, in January 2014 the company announced that it had begun the arduous task of negotiating with major record labels to resolve that pressing licensing issue.
This caught the attention of Twitter, and in March a partnership agreement was announced with SoundCloud developing an integrated app for the service.
In the year In late 2014, a deal with Warner Music Group (a minority shareholder in SoundCloud) included a deal that would allow the publishing arm to collect royalties on songs it chose to monetize on the site, but other accounts were less convincing.
In the year In 2015, speculation about a Twitter acquisition was rife, but according to people close to the matter, Sony Music Entertainment decided to take the entire catalog off the platform, not seeing the kind of revenue they expected from SoundCloud. Needless to say, this took a serious toll on Twitter’s acquisition plans.
Well, fast forward, and now Spotify is looking to buy it. But this news disappeared as quickly as it appeared. By the end of September 2016: interested. In early December 2016, um, no thanks.
For a company that has raised more than half a billion dollars, has recognized artists on stage and been featured at the Grammys, recently announced some key hires and completed an acquisition, it seems like all the right pieces are in place. So what gives?
And that’s nothing to say about a loyal and loyal user base, which, in my experience, is mostly DJs and musicians focused on electronic music who wouldn’t dream of going anywhere else. A quick poll of my electronic music producer/DJ friends revealed that every single one of them is a paying member.
“As a DJ and radio show host, I subscribe to SoundCloud for regular content uploads to my listeners. SoundCloud is by far the best option on the market. No other music upload platform comes close,” commented SoundCloud user Pete. Ellison
However, it’s not all doom and gloom at SoundCloud, as we’ve seen countless strikes across the tech industry in recent months. Soundcloud posted revenues of €193.5 million in 2020, up 31% year-on-year, with annual operating losses narrowing sharply, down 41% year-on-year to €15.4 million.
In the year This isn’t the first time a card swap has been made at SoundCloud, with more than 40% of its workforce laid off in 2017. Immediately following the crash, The Rain Group and Temasek stepped in for $170 million and took a majority stake in the company. As part of the deal, Weissman, now the CEO who has been instrumental in Vimeo’s turnaround, is on board.
“To those affected by this decision, I want to personally thank you for your passion and contributions to SoundCloud and the artist communities we serve. You all have made an incredible impact on the music industry and the lives of artists.
SoundCloud has always been resilient, and together, we will continue to take on the next challenge of leading music,” said Weissman.
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