Could this mean the end of SoundCloud? Reports claim that the online audio streaming company only has enough money to survive for 50 more days. SoundCloud has been having financial trouble for several years now and it has now taken its toll in 2017, the company was reported to have laid off 40 percent of their staff last week and according to statements from the company’s founders, it will may not have enough money to make it through the rest of the summer let alone the rest of the year.
A video conference held by co-founders Alexander Ljung and Eric Wahlforss was held on Monday to explain the layoffs that occurred in the previous week, apparently most of the company was largely uninformed at the time and were shocked to learn that the company would only have enough money to last “until Q4,” which would begin in 50 days. However, SoundCloud apparently stated that there were an “extensive number of inaccuracies” in an article done by TechCrunch and has since released a statement addressing the inaccuracies. “Due to the extensive number of inaccuracies, we will only comment regarding funding and layoffs. To clarify, SoundCloud is fully funded into the fourth quarter. We continue to be confident the changes made last week put us on our path to profitability and ensure SoundCloud’s long-term viability. In terms of layoffs, it is our policy not to discuss individual employee cases, but we can share we continue to work with all employees who were let go to support them during this transition, with employment and financial assistance.”
However, despite the release of this statement, staff members have also released statements saying that the morale of the has dropped very low and many don’t understand the reasoning behind the company continuing to hire new staff only to lay at least one of the newly hired members off, especially given the company’s difficult financial situation. The company confirmed in March, a debt of $70 million to Ares Capitals, Kreos Capital and Davidson Technology and had even suffered a loss of 51 million Euro loss in 2015 and in January Ljung stated that risks and uncertainties are what caused the company to run out of money. Ljung went on to state that the company would need to raise money and look for potential investors and partners, but the company has not been having much luck. SoundCloud’s financial situation and untimely shutdown is unwelcome news to all the streaming website’s fans but hip hop artist Chance The Rapper recently took to Twitter and tweeted, “I’m working on the SoundCloud thing.” Will the hip-hop star be able to save the dying streaming service? With any luck, this won’t be the last that people hear from SoundCloud.
Featured Image via Sky Ferreira Wiki