SoundCloud confirmed that the company is laying off up to 20% of its global workforce due to "challenging economic climate and financial market headwinds," as per Variety.
In an email, CEO Michael Weissman informed the employees on Wednesday, August 3, of the staffing cuts, as per BillBoard.
"We will be making reductions to our global team that will impact up to 20% of our company," Weissman wrote in a memo.
Likewise, the SoundCloud CEO said that it is incredibly hard to make changes that affect people but it is necessary given the economic downturn.
SoundCloud is Reducing Workforce Due to Significant Company Transformation
A rep for SoundCloud confirmed in a statement that the company is reducing the global workforce by approximately 20%.
The company attributed the lay off to a "significant company transformation and the challenging economic and financial environment."
The rep added that in this difficult time, SoundCloud is focused on providing the support and resources to those transitioning. Moreover, the company is reinforcing its commitment to "executing its mission to lead what's next in music."
This isn't the first time that SoundCloud had laid off its workforce. In 2017, the company cut around 40% of its workforce. Then CEO Alex Ljung said that those reduction were needed for the company to "control" its "independent future," as per BillBoard.
Five years after, SoundCloud has moved towards profitability. The company gained a $170 million infusion led by The Raine Group and Temasek.
Likewise, the company attained a $75 million investment from Pandora parent SiriusXM. As part of the deal, SiriusXM took a minority stake in the company.
In 2020, SoundCloud released a statement about its first profitable quarter. Earlier this year, the company announced that its annual revenue was around $300 million.
Read Also: Is Google Interested In Buying SoundCloud?
SoundCloud Will Continue to Focus on Its Mission
In 2019, SoundCloud expanded its service into distribution. More recently, the company introduced a new user-centric royalties initiative.
The user-centric royalties were only initially available for indie artists. However, in July, the Warner Music Group made necessary changes to make the program available to its roster.
In May, the company acquired an AI music curation company called Musiio. This move is made in order to help users find hidden gems before they make it big in the industry.
The technology of Musiio listens to songs, tags users and then inserts them into suitable playlists of users.
Meanwhile, Billboard released portions of Weissman's email to employees on Wednesday, which informed the staff of the upcoming layoffs.
Accordingly, various changes made to the company will serve as "the driving force" that would help the brand "continue to be laser focused on our mission to lead what is next in music."
The CEO's email also said that the SoundCloud transformation that was put into motion last year drives everything that that the company does.
According to Weissman's message, the U.S. and U.K. employees who are affected by the layoffs "will be notified over the next few days."
To discuss the changes in the company in more detail, SoundCloud is planning to host an All Hands meeting this week.
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