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SoundCloud Cuts 40% of Jobs, Closes Two Offices: Is This The End?

SoundCloud has lost its identity and the service is making big cut backs to try and survive


Today is a dark day for SoundCloud. The struggling streaming and discovery service (does anyone really know what it is anymore?) just cut 40% of its jobs and closed two of its four main offices. In a blog post by Alex Ljung, the co-founder said that they are shuttering their San Francisco and London offices and consolidating their operations to their New York and Berlin headquarters.

He keeps an upbeat tenor, making the claim that they have doubled their revenue in the past 12 months and these cuts were necessary for long-term, independent success. Using the word independent would hint that they are not looking for an acquisition offer, though these things can change rapidly.

SoundCloud has not been able to create viable monetization options for creators without alienating its core audience that came to the service expecting an ad-free experience. It is a catch-22 where you need someway to generate money, but to do so will make the experience worse unless you pay for a premium level. SoundCloud has not been able to entice enough users to make that jump and all the while struggled with keeping their creators happy with a subpar app, an unclear copyright apparatus, confusing features and much more.

Users who want to pay for a premium experience have turned to services like Spotify, Apple Music, Amazon Prime, Deezer or even Tidal that don’t have these same issues. There aren’t the repost mafias that trade reposts with each other, manufacturing plays and ruining feeds for users. These probably wouldn’t be needed or as prevelant for artists if monetization wasn’t so difficult.

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This may not be the end of SoundCloud, but the future looks quite bleak. In 2015, the company lost $54 million, which isn’t inherently a bad thing in tech – Spotify and Uber don’t turn a profit and Amazon only just started turning a profit in the past couple of years. The problem is that it is reportedly running out of cash and is struggling to raise more money to keep itself going.

It is shame because SoundCloud became the go-to place for new producers and rappers, helping to launch careers like Chance The Rapper, Kygo, Flume, Lil Uzi Vert and Post Malone. However it has lost its identity, getting stuck in between wanting to be a champion of the little guy and trying to be a service that can cater to advertisers and the majors. It hasn’t found that groove and is paying for it. Big time. 

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