As part of lower location costs, the company said it will expand its presence and workforce in Atlanta.
Pandora announced Wednesday (Jan. 31) it is implementing a restructuring that will reduce its work force by 5 percent and take other cost-saving measures to generate annualized savings of about $45 million to adjusted earnings before interested, taxes, depreciation and amortization.
The redesign shifts resources to focus on ad-tech and audience development efforts while positioning the company for improved operating leverage over time. It also simplifies the organization into a flatter structure for smarter, faster execution, according to the company.
“Pandora is the largest music streaming service in the U.S. People spend more time on Pandora than any other digital platform in the country, and as our dynamic industry evolves, we must also evolve,” said Pandora CEO Roger Lynch in a statement. “As I shared last quarter, we know where and how to invest in order to grow. We have an aggressive plan in place that includes strategic investments in our priorities: ad-tech, product, content, partnerships and marketing. I am confident these changes will enable us to drive revenue and listener growth.”
As a result, Pandora said its overall operating expenses be lower in the next fiscal year because its cost saving measures will more than offset the company’s significant reinvestment in growth initiatives.
Of the expected $45 million in savings, the company said $6.5 million to $8.5 million are related to employee severance and benefit costs. At the end of its prior fiscal year, the company had lost 2,500 employees and early this year the company said it would layoff about 7 percent of its staff, and with the latest cuts means that is is downsizing to about 2,200 staffers.
Moreover, the company said it is taking additional steps to reign in costs further, including focusing tighter business processes, automation, expansion in lower-cost locations and management of content costs. As part of lower location costs, the company said it plans to expand its presence and workforce in Atlanta.
In its most recent financial filing for the nine-month period ended Sept. 30, 2017, the company posted a net loss of $506.5 million, or $2.10 per diluted share, on revenue of $1.07 billion.