Music streaming service Pandora is going to reduce its workforce by 7% in Q1 of 2017, the company announced Thursday after the close of the markets.
Pandora CEO Tim Westergren announced the layoffs in a letter to shareholders, writing:
“In an effort to ensure continued execution across core initiatives in 2017, we took a comprehensive look at our operations and made the hard decisions necessary to focus the company on the most significant opportunities in front of us. As a result, we reduced our U.S. employee base (excluding Ticketfly) by 7% and said goodbye to colleagues who have worked tirelessly to make Pandora the force it is today.”
Westergren went on to say that the company is “prioritizing the highest value opportunities and deprioritizing others” without elaborating further about the areas affected by the cuts. A spokesperson declined to share more details on the subject. Ticketfly, the company’s online ticketing service, will not be affected by the layoffs.
The company also announced that it expects to exceed its previous forecast for Q4 2016 revenue, with advertising being the strongest driver of revenue growth. In addition, Pandora said that its new $5 Plus subscription service, which it launched widely in October, attracted 357,000 new subscribers in Q4.
The company plans to launch a $10 on-demand music service later this quarter. To prepare for this launch, Pandora acquired the failed music streaming service Rdio a little over a year ago.
There have been persistent reports about a potential acquisition of Pandora, which is a publicly traded company, but management had long insisted that it was prepared to stay independent. Thursday’s renewed focus to shore up the company’s balance sheet is likely going to reignite these discussions.
Pandora is scheduled to announce its Q4 2016 results on Feb. 9.