Soundcloud Possibly Going Bankrupt

Last week, SoundCloud laid off 40 percent of its staff, TechCrunch.com reports.

The article claims that ex-employees of the music-streaming service say a meeting was called where co-founder Alexander Ljung said that the company only had enough money to survive until the fourth quarter of this year, which begins in 50 days.

Shortly after the story was published on TechCrunch.com, Variety published an story where SoundCloud representatives said in statement that the company opposed an “extensive number of inaccuracies” and that the company is confident that the layoffs and office closings “put us on our path to profitability and ensure SoundCloud’s long-term viability.”

See the full statement below:

“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.”

Two hours after the Variety article was published, TechCrunch’s Josh Constine, who wrote the original article, sent Variety the following response, which reads in full:

“SoundCloud has clumsily attempted to refute our TechCrunch article on its financial and morale problems by issuing a statement to Variety saying our post contains ‘extensive inaccuracies,’ yet its supposed ‘corrections’ simply repeat what we did publish, and refute something we didn’t publish. SoundCloud writes ‘SoundCloud is fully funded into the fourth quarter,’ which is the same quote we already included from its PR. SoundCloud writes ‘we continue to work with all employees who were let go to support them during this transition, with employment and financial assistance,’ but we never said it wouldn’t support these employees, merely that it uprooted people’s lives by hiring them and then laying them off weeks later. TechCrunch stands by its reporting.”

We will be sure and keep you posted on SoundCloud’s future as the story unfolds.