In a drastic push to reduce its operating costs within a saturated music streaming market, SoundCloud shuttered its San Francisco and London offices and laid off almost half of its workforce this week, according to a statement issued by SoundCloud CEO Alexander Ljung.
Of its 420 staff members, 173 SoundCloud employees were laid off Thursday — a company reduction of nearly 40 percent. The streaming service, which is headquartered in Berlin, will consolidate its remaining staffers within its Berlin and New York offices.
Founded in 2008, SoundCloud has since effectively transitioned from an independent, creator-driven service to a site fully backed by industry stakeholders. It signed licensing and investment deals with all three major labels, the latest of which was an agreement with Sony Music in March last year.
“By reducing our costs and continuing our revenue growth, we’re on our path to profitability and in control of SoundCloud’s independent future,” wrote Ljung in the statement.
The closures come after a report issued in January that detailed SoundCloud’s financial difficulties. Despite Ljung’s statement, which asserted that the company’s revenue doubled in the past year, a report filed by the music streaming service in January showed a loss of $54 million in 2015. The report also cautioned the possibility of SoundCloud running out of funds by the end of this year, though the company secured $70 million of debt funding in March.