C0-Founder Alex Ljun credited the move to a desire for ensured "long-term, independent success", revenue growth and profitability which would come as a result of cost-cutting.
Some of those affected took to Twitter to react - and to advertise their services. Just a few months after being saved from bankruptcy by a $70m loan, the streaming service has made 40 per cent of its staff redundant and closed its offices in London and San Francisco. Most of the content on SoundCloud is free, and a subscription tier introduced past year that put some music behind a paywall hasn't been as successful as executives hoped. SoundCloud veteran David Noël, one of SoundCloud's first employees, left in March, while in February it was reported that SoundCloud's COO and finance director had both left the company.
For a company that was valued at $700 million in 2014, SoundCloud's go-it-alone stance struck some observers as a head-scratcher. 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.
It had already spent an terrible lot of money before moving into the ad-funded and subscription streaming space via long-negotiated deals with the record companies, music publishers and collecting societies.
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"With more focus and a need to think about the long term, comes tough decisions".
SoundCloud's future has been a matter of debate for some time as the company struggles to find a reliable revenue source.
SoundCloud has raised over $190 million (£154 million) in funding. "Without them, we would not be where we are today", he added.
Over the years, SoundCloud has become a must-visit site for well-known and emerging artists to share their music and remixes for free, as well as a home to thousands of radio shows, interviews and podcasts.