Soundcloud has become the latest tech company to get hit by the incoming recession as it announced that it would be laying off 20% of its global workforce, according to a report from Billboard.
The company’s Chief Executive Officer Michael Weissman sent out a memo detailing the changes, “We will be making reductions to our global team that will impact up to 20% of our company.” A company representative told Billboard that the layoffs were part of the “challenging economic and financial environment” and that they were focused on “reinforcing their commitment to executing our mission to lead what’s next in music.”
The layoffs will hit employees in its UK and US offices and they will be “notified over the next few days,” according to Weissman’s message.
The last time the company had announced layoffs was in 2017 when it cutback 40% of its staff. Since then, the company has moved towards becoming a profitable venture. Soundcloud achieved its first profitable quarter in 2020.
Recently, the company rolled out a new royalty system that pays artists directly from the use of their music by subscribers and advertisers instead of pooling all the money together and distributing money based on who has had the most streams.
In the past few months tech companies have been making moves to cut spending and reduce hiring as Silicon Valley braces for an incoming recession. Nearly all of the biggest names in the Valley, including Google, Meta and Twitter have cut back on their hiring targets. Even music streaming platform Spotify has pledged to reduce hiring by 25%. Apple will be cutting its hiring targets in 2023.
Tesla, led by Elon Musk had announced a plan to cut salaried jobs at the company but increase the number of hourly workers. A couple of days after the announcement, the company let go of 200 hourly workers and shuttered one of its California plants.