“Maximizing Beatport” With A “Bloodbath” Of Layoffs: SFX Entertainment [SFXE]
Sketchy reports late last week that SFX Entertainment acquisition Beatport was laying off employees were confirmed yesterday. The firings of approximately 26 employees included numerous engineers, what we ordinary mortals typically think of as programmers, from both the Denver and San Francisco offices in what one "source" calls a "fucking bloodbath." Ousted Beatport employees are said to include some who've been there for ten years presumably since Beatport was founded. No word yet on the Berlin or LA offices. While you may think this news is bad for SFXE, it's not and could possibly even help the stock price.
Josh Constine, reporting for TechCrunch, seems to be the primary source of news at the moment. Yesterday he confirmed rumors and early reports of layoffs at Beatport through both sources and eventually Beatport itself.
SFX Entertainment [SFXE] acquired Beatport back in February and we haven't heard much since related to the acquisition.
According to Constine, 6 engineers in San Francisco, pretty much the whole office, and around 20 Denver employers were fired. Initially the Denver office was going to fire the SF crew via a conference call but due to concerns about SF trashing their office they sent humans to do the job face to face.
One source stated:
"[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."
SFX then confirmed the firings:
"With the recently announced acquisitions of PayLogic and Arc90, this refocus on maximizing Beatport as the definitive site for everything related to Electronic Music is indicative of our commitment to igniting the simmering Revolution of this astounding movement, Electronic Music Culture. We look forward to unveiling a number of exciting new technology initiatives in 2014.”"
Constine claims that the initial plan was for Beatport engineers to "run engineering for the whole corporation." Sounds like a lot of behind the scenes shuffling. Mo' money, mo' politics. Beatport crew lost.
Based on this initial report from TechCrunch, it looks like SFX Entertainment will be focusing on events, ticketing and ecommerce.
Yet SFX claims to be "maximizing Beatport as the definitive site for everything related to Electronic Music." To do that they'll have to have a clear media and community play though how that will manifest remains to be seen.
Speculation: It's quite possible that there was a culture clash between entrenched Beatport employees and the increasingly monolithic SFX Entertainment. At this point acquirers are getting a clear message of who the winners and losers to date have been and what the price for not fitting in will be.
Last week SFXE rose close to its initial pricing in the stock market. This news shouldn't hurt the stock price and may help given that layoffs are typically perceived as a positive by traders.
For a "sober" look at SFXE featuring the downside, see this report by Brian Smith, Jr. for Seeking Alpha.
More:
- SFX Acquires Majority Stake In Paylogic Ticketing For $16.5 Million
- SFX Entertainment [SFXE] Acquires Fame House, Tunezy and Arc90
- One Platform To Connect All Of EDM Culture: SFX Entertainment [SFXE] Gathers Its Forces
Hypebot Senior Contributor Clyde Smith (Twitter/Facebook) is building a writing hub at Flux Research. To suggest topics about music tech, DIY music biz or music marketing for Hypebot, contact: clyde(at)fluxresearch(dot)com.
I don’t understand why SFX purchased Beatport in the first place if they’re looking to solely transition into an EDM specific Live Nation.
Wouldn’t it make more sense to keep the talent they have on board and use them to create in-house services that they can cross-promote with the existing audience on Beatport?
I understand the layoffs to a certain extent, but to decimate the population of entire offices in the fashion that they did really worries me.