SoundCloud the music streaming service headquartered in Berlin announced on Thursday it would be cutting 40% of its workforce as one part of its wider effort of becoming profitable
The venture capital backed business of nine years is eliminating 173 jobs of the current 420 employees across its four offices in Berlin, London, New York and San Francisco.
The offices in San Francisco and London, which employ between 20 and 25 people each, will shut down as part of the company’s restructuring.
CEO and cofounder of SoundCloud Alex Ljung, who will be on stage new week in Berlin for the Tech Open Air conference, told his employees of the job cuts through a video call Thursday afternoon, said one of the employees with SoundCloud, adding that the announcement had stunned him.
Two employees with SoundCloud said the video call shocked them adding they had not anticipated that something like that would happen. They called it a sudden announcement with nobody seeing it coming.
The same employee said that other employees only know as much as was made available to members of the media. We do not know what is actually taking place or what will the next steps be.
The round of job cuts became public following a blog post that Ljung made on the official website of the company.
Over 150 million pieces of content were uploaded to SoundCloud’s platform since it began, including music from some of the biggest artists in the world.
However, the future of SoundCloud has been a debate for quite some time due to the struggles of the company to find a source of revenue that is reliable.
SoundCloud began as a streaming service that was free, but introduced advertisements during 2015, prior to the launch of a subscription service for music streaming, which was launched during March of 2016 to compete with Apple Music, Amazon Music and Spotify.
The cuts in jobs come following report that suggested the company, which has been given a value of $700 million by investors, could be preparing to sell at a much lower price, possibly leaving its early shareholders little to earn from the sale.
SoundCloud has raised over $298 million including $70 million from Twitter, showed data gleaned from Crunchbase.
One source said that SoundCloud was discussing a sale for the price of $1 billion last July, but now that price tag could be down to $250 million or less.