Popular Arabic-language music and content streaming service Anghami has become the latest music company to downsize as growing global economic uncertainty forces companies to cut costs in order to maintain profitability.
The Abu Dhabi-based company said in a statement last week (November 15) that it was reducing its full-time workforce by 22%, or about 39 employees.
“Given the impact of the challenging macroeconomic conditions, we had to take cost disciplinary action to improve our overall performance,” Eddy Maron, Anghami’s chief executive and co-founder said in a statement announcing the company’s third quarter results.
Several music companies have laid off staff or cut capital budgets in recent months as they prepare for a possible economic downturn. This summer, Spotify announced it would cut hiring by 25%, SoundCloud laid off 20% of its staff, and BMI said it was cutting just under 10% of its total workforce, laying off 30 people and leaving some vacancies.
Launched in 2012, Anghami is the most popular streaming and content company focused on Arabic-language music, with around 58% of the Middle East market share and around 20 million active users, according to filings. by the Society.
Since listing on NASDAQ in February, Anghami’s stock has fallen more than 73% to close at $2.70 on Monday. The company’s weak stock price and growing investor interest in music companies based in the Middle East and Africa have fueled discussions about the company’s future. Earlier this month, the German magazine Frankly reported that Spotify was considering buying Anghami.
In an email to Billboard, Maroun said the cuts were necessary as the company struggled to reduce operating expenses and focus on profitability. Maroun declined to answer when asked if the company was preparing for a possible sale.
In its third-quarter results, Anghami said revenue rose 29% to $31.7 million from $24.5 million in the year-ago quarter. The company’s gross profit increased 13% in the quarter ending September 30 compared to the prior year period, helped by a 19% reduction in cloud computing costs and a 15% increase in music traffic during the quarter.
Additional reporting by Alexei Barrionuevo