SoundCloud has not been having a great year. In 2017 alone, the company has lost four major executives, including their COO Marc Strigel and finance director Markus Harder. On Monday, co-founders Alexander Ljung and Eric Wahlforss informed the staff that the company only has enough cash to last them “until Q4.” This news follows a recent blog post from Ljung stating that 173 staffers, nearly 40% of SoundCloud’s employees, were laid off to cut costs. These latest firings are also a part of the company’s plan to close down its San Fransisco and London offices.
Why is this happening?
The music streaming industry has become more competitive than ever. SoundCloud has a difficult time keeping up with the likes of Apple, Spotify, or Amazon. First and foremost, SoundCloud lacks a significant number of paying subscribers. Their subscription-based service, SoundCloud Go, is more affordable per month than Apple Music or Spotify but has not gained the traction that the other streaming services have picked up. Additionally, SoundCloud lacks the large amounts of funding that Apple Music and Amazon have to fall back on.
What does this mean for the future?
Despite decreased popularity in recent years, hopeful artists have continued to utilize SoundCloud’s user-friendly interface to gain an online following. Artists such as Kygo, Post Malone, and Kehlani humbly began their careers on SoundCloud; earlier this year, Kygo collaborated with Selena Gomez on “It Ain’t Me,” which reached the top 10 of the Billboard Hot 100. If the company were to go under, aspiring artists would have to turn to other platforms to fill the gap that the streaming service once filled.