SoundCloud is running out of cash and will only survive “until Q4” reports sources within the streaming platform. Q4 starts in 50 days.
The news arrives less than a week after co-founders Alex Ljung and Eric Wahlforsshref laid off 40% of their workforce and shut down their San Francisco and London offices.
The revelation was first reported via TechCrunch. When the site presented a SoundCloud representative with the leaked information, the representative remained insistent that Ljung nor Wahlforss ever made that announcement to remaining staff and the service remains “fully funded into Q4”. Talks with potential investors do remain open. The rep further notes, via Fact, that these inaccuracies “stem from a misinterpretation of information by one or two laid off employees during a recent all hands meeting”.
During the original statement to TechCrunch, this all-hands meeting was described as a “shitshow”: “I don’t believe that people will stay. The good people at SoundCloud will leave. Eric [Wahlforss] said something about the SoundCloud ‘family,’ and there were laughs. You just fired 173 people of the family, how the fuck are you going to talk about family?"
The employees also mentioned that SoundCloud executives knew about the need for lay offs for months, but refused to notify department directors, continued to spend lavishly on office perks, and even hired new employees into the Berlin office. By not enforcing a hiring freeze (“because it would show weakness”) a number of employees uprooted their lives to take extremely temporary or non-existent roles within the company.
At least one new hire, Vojta Stavik, is considering legal action against SoundCloud because his signed job offer included four-weeks notice of dismissal but the streaming service refuses to pay his salary.
This internal miscommunication looks to slow down the company’s path towards independent success. Staffers have indicated the planned roll out of SoundCloud go subscriptions across South America may be delayed or terminated all together.
For a deep dive into SoundCloud’s stumbles, read TechCrunch’s full report.
More news on SoundCloud as the inner turmoil continues to develop.