SoundCloud joins the depressingly long list of companies in the tech industry that are letting staff go due to the economic downturn. According to Billboard and VarietyThe company’s CEO, Michael Weissman, told employees in an email that it is “making reductions” to its global team that will affect up to 20 percent of SoundCloud. Weissman said the move is necessary “given the challenging economic environment and headwinds in financial markets”. Furthermore, the layoffs and cautious financial decisions the company had recently made have apparently set the company on a path to sustainable profitability.
A spokesperson confirmed the job cuts to Billboard, adding that SoundCloud is providing support to employees who have to leave the company. The online audio distribution platform last laid off a significant portion of its staff — 40 percent in total — in 2017, when it was struggling financially. As Billboard notes, SoundCloud has secured hundreds of millions of investments and has since announced its first profitable quarter in 2020.
In 2021, the company introduced a listener-based royalty model that could lead to better pay for indie artists as subscriber payments go directly to the artists they listen to. Warner Music Group recently acquired the model and became the first major label to do so. SoundCloud also bought an AI music management company called Musiio in May to help users find hidden gems before they go big. Musiio’s technology listens to songs, tags them, and then adds them to appropriate playlists.
Based on SoundCloud’s LinkedIn profile currently has 1,707 employees. If that figure is correct, about 340 people will lose their jobs. Weissman said in his email to staff members that the layoffs will affect workers in the US and UK, who will be notified in the coming days.
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