CEO of SoundCloud Michael Weissman emailed employees on Wednesday (August 3) to announce staffing cuts.
“We will be making reductions to our global team that will impact up to 20% of our company,” Weissman wrote in a memo obtained by Billboard. “Making changes that affect people is incredibly hard. But it is one that is necessary given the challenging economic climate and financial market headwinds.”
“Today’s change positions SoundCloud for the long run and puts us on a path to sustained profitability,” Weissman added. “We have already begun to make prudent financial decisions across the company and that now extends to a reduction to our team.”
In a statement, a rep for SoundCloud confirmed that the company “announced an approximate 20% reduction of its global workforce due to a significant company transformation and the challenging economic and financial environment.” “During this difficult time,” the rep added, “we are focused on providing the support and resources to those transitioning while reinforcing our commitment to executing our mission to lead what’s next in music.”
SoundCloud had previously announced a number of layoffs back in 2017 — at that time, the company cut around 40% of its workforce. Alex Ljungwho was then CEO, said those cuts were necessary for the company to “control” its “independent future.”
In the five years since, SoundCloud has moved towards profitability. The company obtained a $170 million infusion led by The Raine Group and Temasek and a $75 million investment from Pandora parent SiriusXM. (In exchange, SiriusXM took a minority stake in the company.) SoundCloud announced its first profitable quarter in 2020, and earlier this year, it said its annual revenue run rate was around $300 million.
The company also expanded into distribution in 2019. More recently, SoundCloud rolled out a new user-centric royalties initiative, which allocates money by dividing up the revenue generated by each individual, so that a hypothetical fan who only listens to two artists every month would have his $10 monthly fee divided among them. Initially, user-centric royalties were only available for indie artists, but Warner Music Group made the program available to its roster in July.
Weissman’s email to employees this week noted that SoundCloud will “continue to be laser focused on our mission to lead what is next in music,” adding, “the company transformation we set in motion last year drives everything that we do and will continue to be our driving force.”
US and UK employees impacted by the layoffs “will be notified over the next few days,” according to Weissman’s message. SoundCloud is also planning to host an All Hands meeting this week “to discuss these changes in more detail.”