Oakland-based, musician-loved Bandcamp gutted by 50% layoff

Bandcamp built a unique music business: profitable and good for artists with a popular editorial arm. Now, half the employees at the Bay Area firm are losing their jobs, victims of a sudden corporate swap.

The Oakland-based company was purchased by Epic Games — maker of Fortnite and Gears of War — in early 2022. In September, just a year and a half later, Epic announced its plan to sell Bandcamp to Songtradr, a Santa Monica company that specializes in music licenses. Just 50% of Bandcamp’s employees got offers in the acquisition, Songtradr spokesperson Lindsay Nahmiache​ told SFGATE on Monday.

Of Bandcamp’s 118 employees, 58 did not receive offers, and 60 did, Nahmiache said. One of Bandcamp’s remaining employees confirmed this Monday, saying that around 60 people are gone from the company Slack. SFGATE granted the employee anonymity in accordance with Hearst’s ethics policy. Bandcamp co-founder and former CEO Ethan Diamond’s Slack account is also now deactivated, according to a screenshot viewed by SFGATE.

“I know there are open questions around why we did not hire everyone, and that losing team members is never easy,” Songtradr CEO Paul Wiltshire wrote in an email Monday, viewed by SFGATE, that announced the close of the acquisition to remaining Bandcamp employees. “Transparently, the financial state of Bandcamp has not been healthy. While the revenue has been consistent, over the past few years the operating costs have significantly increased making it impossible to continue running the business the way it has been.”

But Bandcamp is hardly a money-burning tech firm. Launched in 2008 in Oakland, the company grew slowly with a model that runs counter to the booming revenues (and losses) of Spotify. While Spotify pays artists a minuscule and variable sum for each play (calculated with “an artist’s share of overall streams across the platform”), Bandcamp is comparatively transparent: The platform steers listeners toward buying artists’ music and then takes a small cut of each purchase. Billboard reported in 2021 that Bandcamp had been profitable for almost a decade.

The careful approach, coupled with a commitment to small and independent artists in its editorial curation, meant that Epic’s 2022 acquisition came as a surprise to many in the music industry. The massive game-maker was riding high on the success of Fortnite, leaning hard into the metaverse and tackling Apple’s app store business in a high-profile lawsuit — not fostering community support for an indie music platform. Bandcamp’s employees unionized about a year after joining Epic, and, in September, the game-maker sold off Bandcamp to Songtradr while announcing 830 other layoffs.

Monday’s close of the Songtradr acquisition caps off weeks of uncertainty for Bandcamp employees. After Epic announced the sale on Sept. 28, many Bandcamp workers lost access to the systems they used to do their jobs, according to a statement from the firm’s union. Songtradr, a week later, posted a statement saying not all Bandcamp employees would receive offers to join the firm — a petition asking Songtradr to recognize Bandcamp’s union has garnered more than 10,500 signatures as of Monday afternoon but no commitment from the firm.

Bandcamp workers were “completely in the dark,” software engineer Will Floyd told SFGATE on Oct. 6, as they waited for updates and hoped for offers from Songtradr to arrive. On Monday, Floyd and dozens of others learned they’re now out of work.

Songtradr’s Nahmiache​ provided a statement to SFGATE in which the firm committed to keep running Bandcamp’s popular Bandcamp Fridays promotion and the editorial arm Bandcamp Daily, but several members of the writing staff have been laid off, including senior editor JJ Skolnik and Atoosa Moinzadeh. A chorus of music writers chimed in online lamenting the layoffs as the latest in a string of music media closures, including Vice’s Noisey, Red Bull Music Academy and NPR’s “Louder Than a Riot” podcast.

The Bandcamp union will negotiate severance packages with Epic, firm spokesperson Elka Looks told SFGATE, and nonrepresented employees will receive six months of severance pay.

Hear of anything happening at Bandcamp or another tech company? Contact tech reporter Stephen Council securely at [email protected] or on Signal at 628-204-5452.