SoundCloud Reportedly Only Has Enough Money to Last Until Q4 of 2017
Update (July 13, 3:54 p.m. EST):
A spokesperson for SoundCloud sent Variety the following statement: “There are a number of inaccuracies within the TechCrunch article. They seem to stem from a misinterpretation of information by one or two laid off employees during a recent all hands meeting. 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. In terms of layoffs, it is our policy not to discuss individual employee cases, but we can share we continue to work with all employees who were let go to support them during this transition, with employment and financial assistance.”
SoundCloud apparently remains in dire straits. Yesterday (July 12), it was reported the streaming platform only has enough funding to last until the fourth quarter of 2017.
The folks at TechCrunch report the startup addressed last week's layoffs—which slashed 40 percent of SoundCloud's staff—during a "tense" meeting with its employees and former employees yesterday. Apparently, those who were laid off wanted explanations for why they were given no warning before they were cut, and the remaining staff wanted to be reassured the staff cuts would preserve their jobs for the long term.
Unfortunately, neither group really got the answers they wanted. SoundCloud founders Alex Ljung and Eric Wahlforss revealed that despite their intentions, their platform only have enough funds to last until this year's fourth quarter, which, according to TechCrunch, begins in 80 days (they originally reported Q4 as starting in 50 days, but later amended the article). The streaming service's PR confirmed to TechCrunch that SoundCloud does, indeed, only have funding into the fourth quarter of this year, but they are talking to investors.
This news seems to contradict Ljung's blog post that claimed layoffs at the company's San Francisco and London offices would keep the brand afloat. "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 a post the day of the layoffs.
TechCrunch notes that a few anonymous SoundCloud employees left the meeting feeling discouraged, feeling the company's message about family to be a disingenuous one.
“I don’t believe that people will stay. The good people at SoundCloud will leave," the employee explained. "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 is coming off launching a new music discovery app a couple of months ago, and at one point was in talks to be bought by Spotify, but now they appear to be in some very serious trouble. If you have music you like on there, better start downloading it now.
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