Earlier this year, SoundCloud was forced to borrow $70 million in order to stay afloat -- a move that came after a potential acquisition by Spotify fell through. In 2014, Twitter also considered purchasing the company. It backed out because "the numbers didn't add up," but later invested $70 million into SoundCloud, though that influx of cash clearly wasn't enough. In an attempt to boost revenue, SoundCloud began offering a subscription service last year but as we reported, the song library was extremely limited and the service wasn't very user-friendly.

Along with the layoffs, SoundCloud is also consolidating its operations to its Berlin and New York offices. Its San Francisco and London offices will be closed down. "We are extremely grateful for the contributions of each and 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," said Ljung.