SoundCloud cuts a fifth of its global workforce, blaming ‘difficult economic climate’

SoundCloud has begun the process of reducing its global workforce by approximately 20%.

SoundCloud CEO Michael Weissman referenced the news on LinkedIn today (August 3), adding, “Making change that affects people is incredibly difficult. But it’s necessary to ensure SoundCloud’s long-term success given the tough economic climate and headwinds in financial markets.

“For those impacted by this decision, I want to personally thank you for your passion and contributions to SoundCloud and the artist communities we serve. You have all had an incredible impact on the music industry and on the lives of artists.

SoundCloud has confirmed that around a fifth of its global workforce will leave the company as a result.

The news follows a broader trend of layoffs in the tech sector this summer.

Crunchbase estimates that 32,000 workers in the US-based tech sector alone have been laid off so far in 2022.

The software giant Oracle, for example, was recently reported consider cutting thousands of jobs around the world as part of a billion-dollar spending-cutting exercise.

Meanwhile, ByteDanceThe short-lived video streaming platform TikTok was reported last month to have started to lay off some of its staff in the United States and to prepare to lay off in Europe.

Now it’s SoundCloud’s turn.

At the end of 2020, the music streaming company said it had 392 employees worldwide (including 359 full-time).

SoundCloud reported revenue of €193.5 million ($218.7 million) in calendar year 2020, up 31% year-over-year.

This is according to SoundCloud Holdings GmbH’s fiscal year 2020 tax report – the most recent year for which the company filed public accounts.

SoundCloud’s annual operating losses decreased significantly in 2020 by 41% year-over-year to €15.4 million ($17.4 million).

SoundCloud said of its 2020 performance that “total revenue exceeded expectations and our operating losses were lower than originally anticipated.”

This isn’t the first time SoundCloud has made mass layoffs at its company: in 2017, the company laid off 173 employees from its global workforce, which then numbered 420.

Following this move, SoundCloud was majority acquired by The Raine Group and Temasek in a $170 million deal the same year – a deal that brought current CEO Michael Weissman into the company.

In 2020, SoundCloud accepted a $75 million investment from SiriusXM (mother of Pandora).

Last month, SoundCloud announced a pioneering new licensing agreement with Warner Music Group (WMG), which will see the latter company adopt/accept a user-centric (or “fan-powered”) royalty payment model of SoundCloud for all its artists. forward.The music industry around the world

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