“These guys will trash the office if we don’t send someone there”, so Beatport flew HR to its San Francisco office to fire the whole engineering team there, a source tells TechCrunch. Multiple sources confirm the 88-person startup laid off large sets of engineers in SF and Denver this week. SFX, the dance music juggernaut that acquired Beatport in February, is axing teams that weren’t making money.
Beatport was founded way back in 2003 and is best known for its popular online dance music store Beatport Sounds that lets DJs download high-quality tracks for use in their concerts. But it also runs a number of other products including Beatport DJs, a social network where artists can connect with fans, Beatport Play, where DJs can download song stems for remixes, and the most recently launched Beatport Mixes, where DJs can sell whole mixtapes.
Yet now, a source tells us “[SFX] is not concerned with anything but the store. It was crazy. It was a fucking bloodbath for sure. Some of the people laid off were working there for almost ten years.” Those include six engineers in SF — essentially the whole office.
That’s why the Denver-based Beatport was considering firing the employees over a conference call, but decided to send human resources representatives to SF. The company worried employees would destroy the office if not supervised. Meanwhile, multiple sources report that the startup has let go of around 20 employees in Denver, including the majority of the engineering team there. Two other music industry sources say Beatport was operating at a loss.
We’re currently awaiting a response from Beatport and SFX regarding the layoffs. However, our sources confirm a vague but early report Thursday from dance music web tv channel and news site Mox.tv, as well as a tweet by former Beatport employee Eric Marcoullier who noted that “devs, sysops, and PMs” were among the Denver employees let go. Marcoullier also trying to find the fired Beatporters new jobs, which is nice considering the holidays are coming up.
Left at Beatport is just a skeleton team to maintain some of its non-store departments that lost their main work force. It’s possible that SFX will shut down some of the products that weren’t pulling in enough money, such as Beatport DJs and maybe Beatport Play. The remaining squad is said to be led by the Arc90 app development team acquired by SFX in October. Originally, SFX planned to have Beatport’s team run engineering for the whole corporation, but now it seems its recent acquisitions including Arc90, marketing agency FameHouse and commerce platform Tunezy will be in charge.
The push to cut the fat from Beatport comes shortly after its parent company’s IPO in October. SFX priced shares at $13 but they’ve fallen to $11.60 since. “New leadership, new direction” a source tells us about SFX’s plans for Beatport. “Once they went public, they started looking at the finances” and decided the SF engineering office and much of the Denver engineering staff weren’t critical.
Apparently SFX’s focus will be on ticketing and events going forward. SFX owns a slew of electronic dance music (EDM) concert promoters including Made Event which runs Electric Zoo, and Disco Donnie Presents, which puts on dance music shows and festivals around the world. It also owns tech startups like Beatport and social TV and second-screen app Viggle. The Beatport cuts could foreshadow streamling of SFX’s other technology companies
At least Beatport’s laid off workers got significant severance packages, especially long-time team members, though this compensation is conditional on the employees not discussing the circumstances of the layoffs. But the details are out now, so we’ll have to see how SFX’s investors react and what the EDM giant does next. It can be a cutthroat business turning youth culture into corporate earnings.