SoundCloud Responds Reports Of Impending Insolvency
Earlier today we told you about reports coming from disgruntled employees, that SoundCloud was so cash strapped that it would run out of operating capital in as little as 50 days, and certainly within a few months.
After laying of 40% of its staff last week, SoundCloud has been rocked by rumors that it was rapidly running out of cash. Now the company has denied that reports, but in terms that leave a lot of room for reading between the lines.
The statement follows in full:
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.
In short, I'd say that SoundCloud is admitting that it's in trouble; just not in as much trouble as the reports this morning implied. What does that mean? 100 days instead of 50? Months instead of weeks?
It's still very hard to see who cutting some jobs leads to a profitable service when the ink is such deep red.