Music streaming platform SoundCloud, best known for kids on social media linking you to their mixtape, has had a rough couple weeks.
Last week, the company laid off 40 percent of its staff and closed their offices in London and San Francisco.
On Monday, co-founders Alex Ljung and Eric Wahlforss claimed the company only had enough cash to last “until Q4,” which is in 50 days.
After TechCrunch reported the story yesterday afternoon, SoundCloud released a statement denying their cash-strapped status and claiming the rumors were started by disgruntled “laid off employees.”
Read the statement in full:
“There are a number of inaccuracies within the TechCrunch article. 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. We continue to be confident the changes made last week put us on our path to profitability and ensure SoundCloud’s long-term viability. In terms of layoffs, it is our policy not to discuss individual employee cases, but we can share we continue to work with all employees who were let go to support them during this transition, with employment and financial assistance.”
While SoundCloud is one of the most popular websites in the world for music streaming, they’ve had trouble actually making that profitable.
Failed acquisition attempts by Twitter and Spotify have left SoundCloud out in the cold while trying to lock down $100 million in funding.
As SoundCloud struggles financially, one has to wonder about the future of the digital music industry. Even Spotify, with all of its functionality and massive user base, is operating in the red.
With these types of services, it appeared that the music industry had figured out how to coexist with the internet, but actually making that relationship profitable has proved to be difficult.
While SoundCloud isn’t dead yet, and maybe the 50 day prognosis was premature, it’s clear there is major trouble ahead for the music streaming platform.
RIP your favorite SoundCloud rapper.