SoundCloud Layoffs Hit 40% of Its Staff as Part of Cost-Cutting Efforts

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SoundCloud Is Cutting 40% of Its Workforce

Renowned music streaming and audio distribution company SoundCloud Limited has announced that it will be laying off 173 employees as part of cost-cutting efforts.

In a note posted to the SoundCloud blog, company co-founder and CEO Alex Ljung announced that the staffers were being let go after “careful and painful consideration.”

The layoffs account for roughly 40% of the company’s workforce, which had 420 employees prior to the layoffs.

Ljung said that the streaming platform has exponentially grown since its launch 10 years ago. In the last 12 months alone, the company more than doubled its revenue. Ljung says, however, that the company is now forced to cut costs in order to stay ahead of the curve.


Ljung has announced that SoundCloud will be consolidating its teams to only two offices: its headquarters in Berlin and another office in New York. Offices at other locations will be closed down.

Competition from Spotify AB, Apple Led to Cost-Cutting

The music streaming company is making an effort to stay competitive while seeking profitability in a cutthroat environment. SoundCloud faces stiff competition from other music streaming services like Spotify AB, Pandora Media Inc, and Apple Inc.’s “iTunes.”

To beat the competition, Ljung says, “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.” The platform is largely a free streaming service, but the company has also introduced paid subscription services.

In addition, in order to beat Spotify and Apple, both of which offer similar subscription services in the same price range, SoundCloud introduced a new subscription plan earlier this year. The mid-priced plan was announced in February and offers ad-free streaming with offline listening.

However, the subscription-based premium model has not been working very well for SoundCloud’s bottom line, as it has failed to bring in the expected number of subscriptions.

SoundCloud management is now considering selling the company to any interested acquirer. So far, however, it has failed to reach a final agreement with any party.

Spotify is reported to have about 175 million listeners in more than 190 countries across the globe.



A note from Alex Ljung,” SoundCloud Limited, July 6, 2017.

SoundCloud Cuts 40% of Staff in Bid to Remain Independent,” Bloomberg, July 6, 2017.