Late Wednesday, Pandora announced major cost-cutting changes were on the way. About 5% of the workforce will be losing their jobs, most likely in advertising sales and client services. The company is calling it an “organizational restructuring,” that will result in a savings of $45 million every year.
In addition to the layoffs there will be other cost-saving measures instituted. According to a press release, 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 company says the restructure “simplifies the organization into a flatter structure for smarter, faster execution.”
One year ago Pandora laid off 7% of its workforce. This latest round is expected to be complete by the end of Q1.
The cost reduction efforts mean Pandora expects operating expenses, excluding subscription commissions, to represent a lower percentage of revenue in full-year 2018 than in 2017. In addition to these changes, Pandora says it will look to capture additional cost efficiencies “with tighter business processes, automation, expansion in lower-cost locations, and management of content costs.”
Pandora has not been able to turn a consistent profit and faces stiff competition from Spotify, Apple Music, iHeartRadio and many other streaming options available to consumers. A huge portion of Pandora’s revenue goes toward music costs.
Ironic. They call the Los Angles Pandora sales office “radio refugees”… starting with the VP of Sales there. Just about everyone there are ex-radio managers or salespeople who were disgruntled with radio and thought “the grass was greener” at Pandora. Many of them now apparently will have to try and work their way back into radio!
Roy, the depth of your knowledge on the subject is puddle-level. unless of course you have worked in that office. meanwhile, radio’s largest ownership group skipped a $102M loan payment.
Wow. Sorry you are so hostile Phil. Are you part of Pandora’s LA Office of “Radio Refugees”?? You must be, lol! Don’t worry, you and most of your Pandora colleagues should still be able to find jobs in radio still. Radio is vibrant and well. Pandora…well, not so much. A great example of how the grass is not always greener.
Or, I just know when someone doesn’t know what they’re talking about. No need to call people who were potentially just let go “refugees”. That’s hostile, and it’s ignorant.