After big layoffs SoundCloud

After big layoffs SoundCloud founder says its strategy is now to ‘take back control’
SoundCloud co-founder Alex Ljung gave his first major public interview to me today at Tech Open Air Berlin.

In the interview, he batted back claims that SoundCloud (SC) is facing tough times, insisting that by drastically cutting headcount by 173 people recently and closing two major offices, SC is on its way to “taking back control” of its destiny and remaining a major independent force in the music and tech industry. He also hinted that new products were being planned and championed SC’s still unique ability for artists to upload their music and be discovered, unlike the major music streaming platforms such as Spotify, Apple Music and Deezer.

“We had to lay off 173 people from our team, or 40 percent of SoundCloud. All of them are incredible people. It’s incredibly sad. But we’re very focused on doing what we can to support them,” he said.

“We saw the amount of support [for these people] from the SC community. They produced a google doc themselves, which SC is also supporting. I wasn’t concerned the news [about the layoffs] leaked, because at that moment I had to deal with telling the company, which was more important.”

I suggested to him that SC was rumored to be still hiring people as close to two weeks before the announcement. He suggested that this was just circumstantial: “This is part of a shift in strategy. We [often] hire people in several countries and it takes a while before they join the company.”

SoundCloud turned over €21.1 million in revenue in 2015 — up 21.6 percent on the prior year. However, in the same period, operating losses widened 25 percent to €48.6 million — as net losses accelerated 30.9 percent to €51.2 million. Operating losses are more than double the size of that compared to revenue. By cutting staff and closing offices ,they’ve achieved a total saving of €16.9 million. So, surely this is a problem? They still have a big gap between revenue and profitability.

Ljung was combative: “We’re one of the largest music platforms in the world. Even just yesterday we were in the top 20 of all the apps downloaded in the app store. So we still have an enormous user base and growth and engagement. So the platform is still growing. Creators are huge on the platform. The numbers of tracks are still growing. So everything in terms of the business is doing well.”

He said they have many more music licenses, and now ad revenues, subscriptions from Go and Go+ products.