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SoundCloud Might Be Dying?

SoundCloud — the world’s largest music and audio platform which let people discover and enjoy the greatest selection of music from the most diverse creator community on earth.

The Berlin-based company since launching in 2008, the platform has become renowned for its unique content and features, including the ability to share music and connect directly with artists, as well as unearth breakthrough tracks, raw demos, podcasts and more.

This is made possible by an open platform that directly connects creators and their fans across the globe. Music and audio creators use SoundCloud to both share and monetise their content with a global audience, as well as receive detailed stats and feedback from the SoundCloud community.

The Potential Death of SoundCloud

Last week, Soundcloud announced that it would lay off 40 percent of its staff in order to not completely go under after repeated attempts to keep the company afloat. The news generated about the potential death of Soundcloud should scare music lovers, but as a new report by TechCrunch reveals, the situation at the company’s HQs may be more dire than previously thought.

The story allegedly uses leaked info from an “all-hands” global conference meeting that took place in Soundcloud’s main offices at New York and Berlin and paints a hopeless picture for the company. Apparently, founders Alex Ljung and Eric Wahlforss told employees that the layoffs merely created enough overhead to keep operations moving comfortably until the beginning of Q4, after which there would be no more expendable finances.

Portraits from Eric Wahlforss (CTO) and Alexander Ljung (CEO) – co founders of Soundcloud for an article in FORBES magazine about their company. © Steffen Jänicke

There are different stories about Soundcloud currently percolating in the media and according to, TechCrunch reported that in an all-hands meeting this month concerning layoffs that affected 40 percent of the company’s staff, management revealed that the site only had enough runway left to get them to Q4 of this year. That’s only 50 days from now. (SoundCloud disputed the figure, telling the site it was “fully funded into Q4” and speaking with investors.)

Soundcloud’s PR is said to have told TechCrunch that the company is “fully funded” during the 50-day lead up to Q4. So, to clarify, the site probably won’t be totally inactive after 50 days but it and the company will just be in an incredibly unstable state (the story mentions that the company is reportedly looking at potential investors to inject Soundcloud with the infusion of cash it needs to keep trucking).

Here’s Soundcloud’s full statement,

There are a number of inaccuracies within the TechCrunch article. They seem to stem from a misinterpretation of information by one or two laid off employees during a recent all hands meeting.

Due to the extensive number of inaccuracies, we will only comment regarding funding and layoffs. To clarify, SoundCloud is fully funded into the fourth quarter. We continue to be confident the changes made last week put us on our path to profitability and ensure SoundCloud’s long-term viability. In terms of layoffs, it is our policy not to discuss individual employee cases, but we can share we continue to work with all employees who were let go to support them during this transition, with employment and financial assistance.

SoundCloud Facing Financial Issues?

SoundCloud has a free tier with ad-supported access to 120 million songs, largely from lower-quality independent artists. Its $4.99 per month SoundCloud Go subscription removes the ads and offers offline listening. And its $9.99 per month SoundCloud Go+ tier adds access to 30 million premium songs from big-name artists like what you’d find on Spotify or Apple Music.

SoundCloud turned over €21.1 million in revenue in 2015 — up 21.6% on 2014. However, in the same period, operating losses widened 25% to €48.6 million — as net losses accelerated 30.9% to €51.2 million. Operating losses are more than double the size of that compared to revenue.

By cutting staff and closing offices ,they’ve achieved a total saving of €16.9 million. So, surely this is a problem? They still have a big gap between revenue and profitability.

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