With the word “discipline” appearing in founder Tim Westergren’s comments, Pandora announced via an 8K filing today that seven percent of its U.S. workforce — not including Ticketfly — is being laid off in the coming weeks as part of a “reduction in force plan.” This likely means the loss of 100-150 staffers.
According to the documents, with the staff reduction, the company estimates it will incur “approximately $5-7 million of cash expenditures” related to employee severance and benefits costs.
Just a month ago, the company announced the departure of COO Sara Clemens.
“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 document reads. “The company expects the reduction in force plan to be completed by the end of the first quarter of 2017.”
“2016 was a year of significant investment for Pandora,” founder and CEO Tim Westergren said in the document. “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 monetization and build on the foundations of our strategic investments.”
The statement then turns to more positive news, in that the company said it anticipates that it “expects to exceed its previously announced revenue and adjusted EBITDA guidance for the fourth quarter of 2016.”
The company also announced that it passed 4.3 million paid subscribers and that its new Pandora Plus service attracted 375,000 new subscribers by the end of 2016.
“The initial response from both new and existing listeners to the enhancements on the service is extremely encouraging,” Westergren said in the document. “This excitement and engagement bodes well for the introduction of Pandora Premium later this quarter.”