In a blog post from SoundCloud co-founder and CEO Alex Ljung last week, SoundCloud announced it would cut 173 jobs and consolidate its team into its Berlin and New York offices, closing its London and San Francisco offices. The job cuts represent approximately 41 percent of the company’s workforce of 420 employees, reported Business Insider. Ljung said the company needs to cut costs and grow advertising and subscription revenue to reach profitability and to remain in control of the streaming music platform’s future.

“In the competitive world of music streaming, we’ve spent the last several years growing our business, and more than doubled our revenue in the last 12 months alone. However, we need to ensure our path to long-term, independent success. And in order to do this, it 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,” Ljung wrote.

“We are extremely grateful for the contributions of each and every every staff member who will be leaving SoundCloud, and we wish all of them the best. Without them, we would not be where we are today,” Ljung added. “By reducing our costs and continuing our revenue growth, we’re on our path to profitability and in control of SoundCloud’s independent future.”

According to Business Insider, one employee said the announcement was sudden, and another said, “nobody saw it coming.” That is hard to believe considering other major changes since the beginning of the year, including the departure of Stephen Bryan, the company’s Chief Content Officer. Bryan had been with the company for three years, around the time SoundCloud was launching its first subscription product for consumers. SoundCloud said it did not have immediate plans to replace Bryan. So much for the deep bench.

“Under Stephen’s leadership, our world-class content, strategy, and creator products teams established pivotal industry partnerships that prepared us for our next phase of growth. We have a clear path forward, and are well-positioned to expand on what differentiates SoundCloud: providing a unique platform and music discovery experience that our creators and listeners are passionate about. This continued evolution would not be possible without the immense talent across our organization.  We are pleased to have such a deep bench of talent at SoundCloud to help us continue to drive our mission to give people the power to share and connect through music,” Ljung said in a statement announcing Bryan’s departure.

Three other key departures this year include David Noel, VP Community and one of SoundCloud’s first seven employees, Marc Strigel, chief operating officer, and Markus Harder, vice president of finance, reported Business Insider.

SoundCloud has about 175 million users, more than 18 million artists, more than 2 million albums, and more than 150 million tracks, but it is not known how many of those users are paying subscribers. Using a freemium model, users can listen to an advertising-supported free product; pay $4.99 for the ad-free SoundCloud Go, a relatively new, on-demand plan; or $9.99 per month for its premium subscription plan, SoundCloud Go+.

Last fall Bloomberg reported that SoundCloud was looking for a buyer. The company was then valued at $700 million during its most recent funding round, including a $70 million investment from Twitter.

Insider Take:

Like Pandora, SoundCloud is struggling to find its footing and the ideal balance between revenue streams and expenses. Its loss of key players and now major job cuts indicate the company is struggling more than originally thought. While its newer subscription products help the company to compete against other streaming music services, it has to find a way to turn a profit, and it clearly isn’t there yet. It doesn’t seem that finetuning its music offerings is the answer, but perhaps major cost cutting measures like layoffs will help them turn a corner.

It would be a shame to see SoundCloud, a trailblazer in the streaming music marketplace, go by the wayside or dramatically lose its value. Hopefully, their leadership changes and cost-cutting measures will help them to refocus their efforts and develop advantageous partnerships. Otherwise, they are in danger of being bought at a rock bottom price.