Pandora Set to Expand its Presence in Atlanta
Pandora has announced on January 31st that it is planning to reduce their work force by 5 percent in order to take some cost-saving measures. However, these changes will generate savings of about $45 million to adjusted earnings annually. Although that is before interest, taxes, depreciation and amortization.
Redesigning the workforce shifts focus to audience and ad/technology development efforts. This positions company for a better operating leverage over time. Simplifying the organization into flatter structure for a smarter and faster execution is the new approach.
Pandora CEO Roger Lynch recently released a statement. “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. 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.”
What Does This Mean for Pandora?
As a result of these changes, Pandora has said that it’s overall operating expense will be lower in the next fiscal year. The cost saving measures will be off-setting the company’s significant reinvestment growth initiatives. Because of the expected $45 million in savings, the company is expected to budget $6.5 million to $8.5 million in employee severance and benefit costs. Last fiscal year, they had lost 2,500 employees and earlier this year the company said it would layoff about 7 percent of its’ staff. As a result, the latest cuts mean downsizing to about 2,200 employees.
Pandora has said that they are taking extra steps to expands costs further. Focusing on tighter business processes, automation, and expansion in lower cost locations and management are apart of the plan. In regard to the lower location costs, this is where Atlanta and its workforce come in.