Pandora Cuts Staff In $45 Million Restructuring
[UPDATED] Pandora announced an organizational restructuring Wednesday that includes layoffs in some departments, as part of a $45 million in cost cutting "designed to prioritize its strategic growth initiatives and optimize overall business performance."
5% of Pandora's workforce was cut Wednesday as the unprofitable music streamer pledged to cut $45 million in expenses. An SEC filing estimated the severance and benefit costs of the layoffs at between $6.5 and $8.5 million.
"Effective immediately, a combination of eliminated roles and other cost-saving measures are expected to result in combined annualized savings of approximately $45 million to adjusted EBITDA," the company said in a statement. "The savings will be reinvested into growth initiatives including ad-tech, non-music content, device integration and marketing technology, toward which the company will redeploy existing employees and hire for new positions."The redesign will also shift resources to focus on ad-tech and audience development efforts.
"These changes allow us to act faster, invest for growth and extend our leadership as the audio market hits what we believe will soon be a major inflection point,” said Pandora's new CEO Roger Lynch.
Pandora also announced plans to expand its presence and workforce in Atlanta, providing a "significant opportunity to add instrumental talent in a region with lower costs" than at company headquarters in Oakland, CA.
More Pain Ahead
But even in today's announcement Pandora admits that these moves may not be enough. "In addition to creating operating leverage with these organizational changes, Pandora is focused on capturing additional cost efficiencies with tighter business processes, automation, expansion in lower-cost locations and management of content costs – all of which will be incremental to the savings above."