Soundcloud music streaming site cuts jobs with profits still out of reach

 
Jasper Jolly
DLD Conference 2012 - Day 2
Soundcloud founder Alex Ljung announced the job cuts (Source: Getty)

Music streaming service Soundcloud will make 173 employees redundant and close its London office as it tries to cut costs and find its way to making money.

The German service will reduce its presence to only two offices, in Berlin and New York, according to a blog post from one of its founders, Alex Ljung. The San Francisco office will also close.

Ljung insisted the cost reduction from laying off workers would set it on the “path to profitability”.

Soundcloud has struggled to compete with other music streaming giants, despite a dedicated user base which reached 175m users, according to Bloomberg figures from January.

Read more: Spotify in advanced talks to buy Soundcloud

The company introduced a paid version of its service in April 2016, but has not managed to turn a profit despite doubling its revenues in the last year.

A $70m (£54m) investment by social network Twitter valued the company at around $700m, but
efforts to sell the company have floundered.

At the end of last year negotiations with Spotify over a possible takeover fell through after disagreements over the price. Its larger rival, based in Sweden, dominates the market along with other big tech companies running equivalent services like Google, Amazon and Apple.

Ljung said the service will still be available in 190 countries, despite the staff cuts.

He wrote: “We need to ensure our path to long-term, independent success. And in order to do this, 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.”

Read more: Twitter has invested $70m in music streaming service SoundCloud

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