SoundCloud rejects article which claims it’s running out of cash
SoundCloud has rubbished a report that claimed the popular but financially-strained streaming music service was counting down the days until its own extinction.
The music service’s problems came into focus last week when Alexander Ljung announced via a blog post the company would let go of 173 staff (or about 40% of its workforce) as part of a painful restructuring measure which would also involve the closure of its offices in San Francisco and London.
“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, adding the 10-year-old business had more than doubled its revenue in the last 12 months alone and now operates in more than 190 countries.
“However,” he writes, “we need to ensure our path to long-term, independent success. And in order to do this, it requires cost cutting, continued growth of our existing advertising and subscription revenue streams, and a relentless focus on our unique competitive advantage — artists and creators.”
Enter TechCrunch, which claims Ljung and co-founder Eric Wahlforss confessed the layoffs only saved the business enough money to have runway “until Q4,” which begins in just 80 days, a figure adjusted up from the 50 days which was initially reported.
SoundCloud took issue with the claims and responded with its own statement, which it issued to Variety. “There are a number of inaccuracies within the TechCrunch article,” the message reads. “They seem to stem from a misinterpretation of information by one or two laid off employees during a recent all hands meeting. 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.”
The stoush didn’t stop there. TechCrunch’s Josh Constine, who penned the piece, issued a follow-up in which he said SoundCloud “clumsily attempted to refute our TechCrunch article on its financial and morale problems by issuing a statement to Variety saying our post contains ‘extensive inaccuracies,’ yet its supposed ‘corrections’ simply repeat what we did publish, and refute something we didn’t publish.”
TechCrunch, he says, “stands by its reporting.”
This article originally appeared on The Industry Observer, which is now part of The Music Network.