Pandora Radio May Reportedly Lay Off 100-150 Staffers: What Does This Mean For The Future Of The Streaming Radio Provider?

Is Pandora Radio in trouble?

The Hollywood Reporter states that the popular streaming internet radio provider is set to lay off 7 percent of its U.S. staff members within the next few months.

The news comes nearly one month after Pandora Radio announced that COO Sara Clemens would be leaving the company.

According to the report, Pandora made the announcement on Thursday while referring to the drastic change as part of the company’s “reduction in force plan.”

Does this indicate the beginning of the end for Pandora Radio? Not necessarily. The documents clearly outline the overall approach that Pandora Radio is taking to essentially improve their company as a result of this planned “reduction.”

“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.”

Based on the documents filed regarding this announcement, that does not necessarily mean that Pandora Radio will be able to sever ties with those employees without paying for it.

The report states that approximately $5-7 million in cash expenditures are expected when they take benefit costs and employee severance packages into consideration.

Pandora executives seem to have a positive outlook on the aftermath of this planned reduction and what it means for the future of the company. Keep in mind that a growing number of streaming music websites and internet radio stations that have emerged since Pandora Internert Radio first emerged 17 years ago in January of 2000.

As mentioned above, the company seemed to receive a striking blow when it announced the departure of Sara Clemens as COO. Clemens worked for Pandora for more than two years before the news of her pending resignation was confirmed in late December. The required 8-K report that was filed for investors to review as a result of her resignation claimed that she would still remain a Pandora employee “for a transition period to be determined.”

According to Billboard magazine, a statement issued by a Pandora rep claimed that Clemens “played a pivotal role in changing the perception of Pandora among the music industry” — contributing to their positions “as a true partner to music makers.”

However, Pandora seems to still be moving along strong — reportedly having more than 4.3 milion paid subscribers for their service. According to The Hollywood Reporter, the company was even able to gain 375,000 new subscribers for their premium service, Pandora Plus, by the end of last year. In regards to the successful response to Pandora Plus, Pandora founder and CEO Tim Westergren claimed that the initial response to the service was “extremely encouraging.” He further stated that the “excitement and engagement bodes well for the introduction of Pandora Premium later this quarter.”

With that type of positive momentum heading into the new year, it should not be much of a surprise why Westergren shared his own positive thoughts about the planned workforce reduction in the document.

Westergren reflected on the company’s performance in 2016 and the goals they will strive to achieve in 2017.

“2016 was a year of significant investment for Pandora. In 2017, we will manage the business toward full year adjusted EBITDA [Earnings Before Interest, Tax Depreciation and Amortization] profitability. While making workforce reductions is alsways a difficult decision, the commitment to cost discipline will allow us to invest more heaviliy in product development and monetization and build on the foundations of our strategic investments.”

Where Pandora Internet Radio will go in the future is yet to be seen. However, it seems as if this upcoming downsizing of the company staff will allow Pandora to reinvest into the future enhancement of the company.

[Featured Image by Richard Drew, File/AP Photo)