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Following Massive Layoffs, Is SoundCloud Treading Water?

Last week the music streaming site SoundCloud laid off around 40% of their employees leading to speculation they were struggling to stay afloat as a company.

On July 6th, Alex Ljung, one of the two founders released a statement regarding the layoffs. “With more focus and a need to think about the long term, comes tough decisions. Today, after careful and painful consideration, we took the difficult step to let go of 173 SoundCloud staffers and consolidated the team into two offices: Berlin and New York. We are extremely grateful for the contributions of each and every staff member who will be leaving SoundCloud, and we wish all of them the best. Without them, we would not be where we are today.”

Tech Crunch reported that sources with the company revealed that “Alex Ljung and Eric Wahlforss confessed the layoffs only saved the company enough money to have runway “until Q4” — which begins in just 80 days.” An anonymous employee also told Tech Crunch regarding the current morale: “it’s pretty shitty. Pretty somber. I know people who didn’t get the axe are actually quitting. The people saved from this are jumping ship. The morale is really low.”

Chance the Rapper, who got his early start thanks to the service, took to Twitter to raise awareness of how much the site has helped emerging artists and voice his support of it’s future, revealing that Alex Ljung assured him the streaming site will stick around:

What do you think is in store for SoundCloud? Is Chance correct in believing Alex’s words of faith in the company or are they headed for disaster? Let us know in the comments below!