Reports have begun surfacing that SoundCloud may truly be on its last leg.
Truth be told, things haven’t looked well for the streaming company for the entirety of 2017. Despite still being hugely popular and ahead of its competitors as far as some of its offerings go, the company has had financial problems for years now and they have only been getting worse. This resulted in 40 percent of its staff getting laid off last week and statements from its founders that it may not have enough money to see it through the year.
TechCrunch is now reporting that the company may not even have enough funds to see it past the next 50 days.
The report alleges that a video conference was conducted by SoundCloud co-founders Alexanger Ljung and Eric Wahlforss to go over last week’s layoffs to the remaining staff at the coming, during which they were told that the company only has enough liquid cash to last until Quarter 4, which begins in 80 days from now. [Correction: 80 days, not 50 as previously written]
When asked about this by TechCrunch, a SoundCloud representative stated that the company is “fully funded into Q4” while adding that it is in talks with potential investors to bring in more cash. The unnamed staffer quoted by TechCrunch went on to say that morale is “pretty shitty. Pretty somber. I know people who didn’t get the axe are actually quitting. The people saved from this are jumping ship. The morale is really low.”
The layoffs raised quite a few eyebrows of concern, but also had many questioning the management direction of the company considering the fact that it hired new staff only to lay them off shortly after. One in particular, Vojta Stavik, was laid off as he was in the process of moving his entire life to Berlin after being hired. He was scheduled to start July 17th only to be laid off on July 7th: “So it means we are gonna act like my application to SoundCloud never happened?” Stavik asked CTO Artem Fishman. “Yes,” Stavik said the CTO replied. TechCrunch reports that “Stavik is now exploring legal action against SoundCloud because he says his signed job offer included four weeks notice of dismissal, yet ‘SoundCloud claims they are not going to pay me my salary during those 4 weeks.’”
When asked about his insistence to continue hiring new personnel, Ljung simply replied that a hiring freeze would have been a sign of weakness he was not willing to convey.
In March, the company confirmed the latest in a series of financial infusions, a total of $70 million in debt funding from Ares Capital, Kreos Capital and Davidson Technology. This followed 2015’s €51 million loss on revenue of €21.1 million, as well as the more recent $70 million cash infusion from Twitter in June of 2016, and another $35 million of debt financing in January of last year.
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