Report: SoundCloud Only Has Enough Funding For The Next 50 Days
A representative for SoundCloud said that the company believes their recent layoffs will put them on the “path to profitability and ensure SoundCloud’s long-term viability.”
On July 6, SoundCloud co-founder Alex Ljun issued a statement, announcing that 173 employees, amounting to 40 percent of the staff, had been laid-off from the Berlin-based company. “By reducing our costs and continuing our revenue growth, we’re on our path to profitability and in control of SoundCloud’s independent future,” Ljung wrote in the statement.
According to a recent TechCrunch report, Ljung's hopeful tone masked a more chaotic scene inside the company, as SoundCloud sources detailed a company-wide meeting that took place on Tuesday. During the video conference, founders Alex Ljung and Eric Wahlforss reportedly told the remaining staff that the company only had enough funding to make it to “until Q4” — or for another 50 days.
"There are a number of inaccuracies within the TechCrunch article," A spokesperson for SoundCloud said in statement to The FADER. "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."
One employee, Vojta Stavik, who was scheduled to begin at SoundCloud on July 17, was informed that his job was cancelled on July 7. Stavik is now considering legal action against SoundCloud because his signed contract included four weeks notice of dismissal, according to TechCrunch.
After signing licensing deals with major labels in March, SoundCloud launched its own paid service, SoundCloud GO, but the company has neglected to released subscriber figures. In the past year, multiple companies including Spotify, Twitter, and, most recently, Google, have been rumored as potential buyers.