SoundCloud lays off 40% of its workforce, says it’s not going anywhere

Closing in on nearly a decade in business but failing to turn a profit, indie music platform SoundCloud has let 173 of its staffers go this week.

That amounts to nearly 40 percent of its workforce; it’s also closing its offices in San Francisco and London. The idea is to cut down on overheads and keep the company afloat as it tries to figure out how to sustain its service.

That doesn’t bode well for the upstart streaming service, which previously was being considered for acquisition by Twitter and Spotify – but those deals are ancient history now.

Although co-founder Alex Ljung noted that the company “more than doubled our revenue in the last 12 months alone,” TechCrunch estimated that SoundCloud’s fiscal year 2016 revenues would only be around $57 million.

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That’s a pittance compared to Spotify’s $2 billion and Pandora’s $1.39 billion in revenue from last year, and may not be enough to cover the costs of product development and music licensing needed to compete with these heavy hitters.

It seems like SoundCloud hasn’t yet figured out the perfect recipe for making money: The company, which has raised about $190 million to date, previously launched a premium service called SoundCloud Go to offer listeners an expanded catalog of ad-free music of about 150 million tracks.

However, it does have a large following of about 175 million users across 190 countries (or, at least, it did three years ago), which is a massive achievement for a music service built around a community of independent creators. Now, if only SoundCloud could grow its offering into something its fans want to pay for.