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Summary:

Rdio may have tripled the number of new sign-ups this year, but the company still laid off a reported 35 people Tuesday to cut costs.

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San Francisco-based music subscription service Rdio has been hit with significant layoffs, affecting as many as 35 staffers, according to a TechCrunch report. Rdio has since confirmed the layoffs, with Rdio’s Director of Global Public Relations Nada Antoun telling us via email:

“Rdio confirms making workforce reductions yesterday to improve its cost structure and ensure a scalable business model for the long-term.”

The company declined to comment on the specific number of employees let go.

Rdio has long struggled to compete with Spotify, which now has more than six million paying subscribers, and is reportedly in the process of raising another $200 million in funding. Rdio hasn’t publicly disclosed the number of its paying subscribers, but the company said in a statement Tuesday that it has “tripled the number of new users” since the end of 2012. It also said that 90 percent of its subscribers pay $10 per month for the service – something that could change soon, as Rdio is looking to get more users through free and ad-supported offerings.

Notably absent from Rdio’s statements Tuesday was Vdio, the online video service run by the company. Vdio launched in April in the UK and the US, and offers consumers TV shows and movies on a transactional basis. Company executives have long said that they intend to eventually turn Vdio into a subscription offering that is closely tied to Rdio, but it’s unclear how advanced these plans are, or how this week’s layoffs affect Vdio’s future.

In the music space, Rdio isn’t the only company looking to cut costs in order make subscriptions more sustainable. Music subscription pioneer Rhapsody laid off 30 people, and ousted its CEO Jon Irwin as well as the company’s CFO Adi Dehejia, in September.

  1. I sure hope they find a way to remain profitable and stable. Spotify isn’t available in Canada and many people I know are discovering and signing up for rdio.

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