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Pandora to axe 7% of its workforce

By | Published on Friday 13 January 2017

Pandora

Pandora is celebrating its upcoming move into fully on-demand streaming by axing 7% of its workforce, which is one way to do it.

The publicly listed US streaming service announced the redundancies – which don’t impact on its Ticketfly subsidiary – yesterday, confirming it needed to cutback the size of its overall headcount in order to save money. Past company filings put the Pandora workforce at just under 2200 at the end of 2015, which means it’s likely in the region of 150 people will be impacted by the downsizing.

The company said in a statement that “the reduction in force will allow the company to focus and realign existing resources on execution and make further investments in product innovation to drive advertising revenue and subscription growth. The company expects the reduction in force plan to be completed by the end of the first quarter of 2017”.

Meanwhile CEO Tim Westergren added: “2016 was a year of significant investment for Pandora. In 2017, we will manage the business toward full year adjusted EBITDA profitability. While making workforce reductions is always a difficult decision, the commitment to cost discipline will allow us to invest more heavily in product development and monetisation and build on the foundations of our strategic investments”.

Having basically admitted that its core business to date – selling ads around its free-to-access personalised radio service – is not sufficient for the company to go into profit, Pandora has been busy diversifying of late, in particular by trying to capitalise on its fan data to move into ticketing, and by ramping up its paid-for streaming efforts.

That includes more proactively promoting its $5 a month premium personalised radio service – which it says now has over 4.3 million subscribers – as well as moving into fully on-demand streaming at ten dollars a month at some point this quarter, putting the company into head-to-head competition with Spotify and Apple Music for the first time.

However, both ticketing and on-demand streaming are in themselves tricky markets to crack. Speculation continues that Pandora would be better off taken back into private ownership, which would take it out of the glare of Wall Street and possibly deliver a cash boost.

Talks with potential bidders have been rumoured, though so far haven’t progressed, with on again off again speculation about a sale causing the firm’s share price to wobble. Confirmation that the next set of Pandora financials should be ahead of expectations plus the decision to cut costs may aid attempts to find a buyer.



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