Streaming company SoundCloud is cutting about 20 percent of its global workforce. Billboard reported on August 3rd that SoundCloud CEO Michael Weissman told the staff in a company memo that the change is mostly due to the current economic climate. Employees affected would be notified over the next several days.

“Today’s change positions SoundCloud for the long run and puts us on a path to sustained profitability,” Weissman wrote in the memo. “We have already begun to make prudent financial decisions across the company and that now extends to a reduction to our team.” In a statement to Billboard, a SoundCloud representative confirmed the news, and said: “During this difficult time, we are focused on providing the support and resources to those transitioning while reinforcing our commitment to executing our mission to lead what’s next in music.”

In 2017, SoundCloud fired about 40 percent of its workforce, citing it as necessary for the company’s “long-term, independent success.”

In March 2021, SoundCloud implemented a new payout system that allocates funds paid in by subscribers or advertisers directly to the artists fans choose to stream, instead of pooling subscription and advertising money together, then dividing it based on which artists contributed the most streams, like its competitors Spotify and Apple Music. In July, they adopted a licensing deal with Warner Music Group to share the same royalties system.

SoundCloud is just one of many tech companies to recently announce either layoffs (Tesla, Substack, Coinbase, and OpenSea, to name a few) or adjustments in hiring plans. In June, Spotify said in a company memo that it would be reducing its hiring by 25 percent and “evaluating” company “headcount growth.” Other companies like Google, Twitter, and Meta have also recently announced hiring slowdowns and freezes, while Apple reportedly intends to slow down hiring in 2023.