- Pandora laid off 5% of its workforce Wednesday as part of cost-cutting efforts to boost the slumping company.
- The music streaming service, which is headquartered in Oakland, California, is looking to expand its presence in Atlanta, Georgia due to a lower cost of living.
- The company expects this reorganization to save $45 million annually.
The $1.2 billion internet radio company Pandora laid off 5% of its employees on Wednesday in order to "prioritize its strategic growth initiatives and optimize overall business performance," according to a federal filing by the company.
It's not immediately clear how many jobs these layoffs will affect. The last time Pandora disclosed an official headcount was December 2016, when it had 2,488 employees. We've reached out for clarification from Pandora and will update if we hear back.
Wall Street responded favorably to the announcement, however, with Pandora shares up nearly 4% to $4.78 in after-hours trading at the time of writing.As part of this restructuring, the company will shift away from investments in its Oakland, California headquarters, and expand its workforce in Atlanta, Georgia, where the cost of living is lower. The layoffs, however, are company-wide and will impact employees across its six main offices, as well as regional sales and support staff throughout the US.
“Atlanta is a city with a rich history in music and a large pool of diverse tech talent that we can tap into as we scale,” Pandora CEO Roger Lynch said in a statement. “While we are committed to having Oakland remain our headquarters, we’re excited to build on the great foundation of our awesome team there and expand our presence in Atlanta over time.”
Lynch took over as CEO of Pandora in August 2017, replacing company cofounder Tim Westergren.
Pandora said in a press release that it expects the job cuts and "other cost-savings measures" to save the company $45 million annually in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
The reduction plan, which was approved by the board of January 11 and shared with the impacted employees on Wednesday, will cost the company $6.5 million to $8.5 million in severance and benefit costs, according to the form.
"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," the company wrote.
Pandora's last major layoffs were in January 2017, with a restructuring that affected 7% of its workforce.
Join the conversation about this story »
NOW WATCH: Mysterious signals are probably coming from space every second and no one can explain why