Anghami Cuts Staff by 22%, Reduces Cloud Computing Costs to Focus on Profitability
Written by djfrosty on November 21, 2022
The popular Arab-language music and content streaming service Anghami became the latest music company to cut staff 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 (Nov. 15) that it was reducing full-time employee headcount by 22%, or roughly 39 employees.
“Given the impact of challenging macroeconomic conditions, we had to take some cost disciplinary measures to improve our bottom-line performance,” Eddy Maroun, Anghami’s chief executive and co-founder, said in a statement announcing the company’s third quarter earnings.
Several music companies have let go of staff or cut investment budgets in recent months as they prepare for a possible economic downturn. This summer, Spotify said 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, through a combination of letting 30 people go and leaving certain jobs unfilled.
Launched in 2012, Anghami is the most popular streaming and content company focused on Arabic-language music, with about 58% of the Middle East’s market share and around 20 million active users, according to company filings.
Since going public on the NASDAQ in February, Anghami’s stock has declined by more than 73% to close at $2.70 on Monday. The company’s low stock price and growing investor interest in music companies based in the Middle East and Africa has fueled market chatter 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 worked to reduce operating expenses and focus on profitability. Maroun declined to answer a question about whether the company was preparing for a possible sale.
In its third quarter earnings, Anghami reported that its revenues grew by 29% to $31.7 million, up from $24.5 million in the year-ago quarter. The company’s gross profit rose 13% in the quarter ending Sept. 30 from the year-ago period, helped by a reduction in cloud computing costs by 19% and a 15% increase in music traffic in the quarter.
Additional reporting by Alexei Barrionuevo