Soundcloud is having financial problems which could affect a section of the Nigerian music industry.
These are scary times for the Nigerian music industry, as Soundcloud, a crucial platform for emerging artists might reportedly go down.
Last week, the company announced that it would disengage 40 percent of its staff and close its London office in order to prevent itself from crashing. But according to a new report by TechCrunch, the company is in more trouble than we all think.
The story which is causing ripples in the global tech and music space allegedly reports leaked information from the company’s global conference meeting which held in Soundcloud’s New York and Berlin office. And based on that, it paints a grim picture for the future of the company with the company only having 50 days to survive.
The company’s founders, Alex Ljung and Eric Wahlforss had played down the situation, telling employees that the job cuts was to free up funds to keep operations moving comfortably until the beginning of the fourth quarter of 2017.
According to Soundcloud's PR who spoke to TechCrunch, the company will still have enough funds for the 50 days before the final quarter. They also said the platform will not be inactive after that, but the company will be unstable as it is looking for new investors to pump money into their operations.
In Nigeria Soundcloud is important to the music industry because it is the leading platform amongst emerging stars who utilize its reach and community to host and promote new music. In recent years, it has attracted an alternative music community of creators and fan base, with the term “Soundcloud Artists” coined as a result of this. Notable Soundcloud stars include Odunsi The Engine, Lady Donli, Tay Iwar, Genio Bambino and more.
What this means for them is that they are in danger of losing years-worth of data, fans and activity due to the problems faced by the platform. Without the platform, they will be forced to seek out new platforms and build from the scratch again.
Some Nigerian and popular artists have already reacted to the news, including Chance The Rapper who said he is "working on the Soundcloud thing." See some of them below.
Here's Soundcloud's full statement, released in reaction to the article:
There are a number of inaccuracies within the TechCrunch article. They seem to stem from a misinterpretation of information by one or two laid off employees during a recent all hands meeting.
Due to the extensive number of inaccuracies, we will only comment regarding funding and layoffs. To clarify, SoundCloud is fully funded into the fourth quarter. We continue to be confident the changes made last week put us on our path to profitability and ensure SoundCloud's long-term viability. In terms of layoffs, it is our policy not to discuss individual employee cases, but we can share we continue to work with all employees who were let go to support them during this transition, with employment and financial assistance.