Pandora is pink-slipping about 5% of its workforce, a move the streaming-music company said will help it save $45 million annually.
According to Pandora, the restructuring will shift employee resources to focus on ad-tech and audience development efforts and will combine certain roles. Pandora also announced plans to expand its presence and workforce in Atlanta, a region that has lower costs than the company’s headquarters in Oakland, Calif.
The company — which has struggled to compete against rivals including Spotify and Apple Music — last reported a headcount of 2,488 employees as of the end of 2016.
Pandora shares rose 3% in after-hours trading Wednesday on the announcement, after closing up 3.7% earlier at $4.78 per share.
“We have an aggressive plan in place that includes strategic investments in our priorities: ad-tech, product, content, partnerships and marketing,” Pandora CEO Roger Lynch, who took the helm last fall after heading Dish Network’s Sling TV, said in a statement. “I am confident these changes will enable us to drive revenue and listener growth.”
The company’s board approved the restructuring plan on Jan. 11, and employees affected by the layoffs were informed of the plan on Wednesday, according to an 8-K filing with the SEC. Pandora expects the restructuring to be substantially completed by the end of the first quarter of 2018.
Pandora estimated that total costs and cash expenditures for the layoffs will be $6.5 million to $8.5 million, substantially all of which are related to employee severance and benefits costs.
Last year, Pandora laid off about 50 employees after it decided to shut down operations in Australia and New Zealand.
© 2020 PMC. All rights reserved.