SoundCloud is closing its offices in London and San Francisco as it axes 40% of its workforce in a dramatic cost-cutting move.

The German-born streaming company has informed its staff today that 173 jobs are being cut, from a total headcount of 420.

The business will consolidate its operation across its New York and Berlin offices.

The last available annual accounts for SoundCloud are for 2015, when revenues were up 21.6% to €21.1m ($22m), but net losses accelerated 30.9% to €51.22m ($52m).

When these figures were filed in January, SoundCloud CEO and co-founder Alexander Ljung noted that the company may “run out of cash” before the end of 2017 if it could not secure further financing.

Recent rumors have suggested that Deezer – majority owned by Len Blavatnik’s Access Industries – could acquire SoundCloud in the coming months.

“We need to ensure our path to long-term, independent success,” Ljung said in a blog post today.

He commented that the business has doubled its revenue over the past 12 months – but didn’t reveal what has happened to losses.

Ljung said: “By reducing our costs and continuing our revenue growth, we’re on our path to profitability and in control of SoundCloud’s independent future.”

(Read Ljung’s statement in full at the end of this article.)

SoundCloud has lost at least four key senior staff members this year alone.

In May it said goodbye to Chief Content Officer Stephen Bryan, who left to join his former Warner colleague Lyor Cohen at YouTube.

Bryan’s departure came three months after SoundCloud split with its COO Marc Strigel and Finance Director Markus Harder.

It also lost General Counsel Neil Miller this year, who left to join JAG Shaw Baker – and was replaced by Merritt Farren.

Alexander Ljung’s statement in full on SoundCloud’s 40% staff reduction

Eric [Wahlforss] and I founded SoundCloud nearly 10 years ago as we saw a need for something that would enable artists to share and connect through music. As we hovered together back in 2008 to push the button that would make SoundCloud live for the entire world, we had no idea the impact our, then tiny, platform would have on the future of music culture, and millions of listeners and artists around the globe.

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.

With more focus and a need to think about the long term, comes tough decisions. Today, after careful and painful consideration, we took the difficult step to let go of 173 SoundCloud staffers and consolidated the team into two offices: Berlin and New York. 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.

By reducing our costs and continuing our revenue growth, we’re on our path to profitability and in control of SoundCloud’s independent future.

So what does this mean for SoundCloud? The SoundCloud platform listeners and artists love will remain available in more than 190 countries globally. SoundCloud will continue to be the place for what’s new, now and next in music, powered by the world’s most diverse music community. I look forward to sharing more about our future plans in the weeks and months ahead.

AlexMusic Business Worldwide