Things at Soundcloud are looking very gloomy.
Last week, the user-generated streaming service suddenly laid off 40 per cent of its staff. Despite 175 million monthly users, Soundcloud announced it had made 173 employees redundant and closed its San Francisco and London offices. According to CEO, Alex Ljung, the severe measures were “to ensure our path to long-term, independent success.”
But now, it looks like those changes aren't actually going to solve anything.
According to TechCrunch, staff were called for a video conference on Wednesday, where Ljung and co-founder Eric Wahlforss reportedly confessed the layoffs had only saved Soundcloud enough money to last until Q4. That's another 80 days.
One staff member told TechCrunch that remaining staff’s morale was, understandably, very low:
“I don’t believe that people will stay. The good people at SoundCloud will leave. Eric [Wahlforss] said something about the SoundCloud ‘family,’ and there were laughs. You just fired 173 people of the family, how the fuck are you going to talk about family?”
SoundCloud has since refuted claims made in the article, telling Variety that it has “a number of inaccuracies”.
“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,” it reads.
TechCrunch writer, Josh Constine, has responded, saying the statement’s “supposed corrections” are a rehash of what was published. He concluded stating that “TechCrunch stands by its reporting.”
It’ll be interesting to see what happens next. In the meantime, third parties are advising musicians to back up their music, just in case.