Streaming service SoundCloud has cut about 40 per cent of its staff, in a move that will allow the company to better compete with its larger music streaming rivals, Spotify and Apple Music, Bloomberg reports.
SoundCloud informed its staff Thursday that it would be cutting 173 jobs from its team of 420 employees.
In January, SoundCloud said it was at risk of running out of money this year, especially if its subscription service continued to struggle. (The last official numbers we have show SoundCloud losing around $US52 million in 2015.)
The company will reportedly be closing its San Francisco and London offices and consolidating its operations to two locations, its Berlin headquarters and another office in New York.
In a blog post on SoundCloud’s website, Alex Ljung, the company’s co-founder and CEO, discussed how the cost-cutting move will work to ensure the company’s “path to long-term, independent success.”
“By reducing our costs and continuing our revenue growth, we’re on our path to profitability and in control of SoundCloud’s independent future,” Ljung wrote.
Though SoundCloud has around 175 million listeners, the company remains unprofitable.
Its struggles have largely been due to the fact that the majority of its content consists of free music from independent artists. The company’s paid subscription service in the vein of Spotify and Apple Music, SoundCloud Go, has failed to make much noise in an already crowded market.
SoundCloud was not immediately available for comment.