Music streaming platform SoundCloud has closed down its London office and fired 173 employees, almost 40 per cent of the company's staff, concentrating its efforts at offices in Berlin and New York City.
In an effort to maintain their independence, the founders of SoundCloud have closed their San Francisco and London offices, laying-off 40 percent of their staff members in the process. The company's operations will be consolidated at its headquarters in Berlin and another office in NY. SoundCloud is based in Berlin and will maintain a second office in NY.
Ljung insisted the cost reduction from laying off workers would set it on the "path to profitability".
Co-founder and CEO Alex Ljung said they've spent the last several years growing the business.
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Recent rumors have suggested that Deezer - majority owned by Len Blavatnik's Access Industries - could acquire SoundCloud in the coming months.
The company's future path "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", he wrote in a blog post.
"With more focus and a need to think about the long term, comes tough decisions".
A representative for SoundCloud was not immediately available for comment. "I look forward to sharing more about our future plans in the weeks and months ahead". The service, valued at $750 million in 2014, has been trying to raise $100 million to keep the company above water.