Music-streaming service Pandora joins the growing list of startups laying off employees to survive in a worsening economy. The company let go 20 people yesterday, or 14 percent of its staff. Founder Tim Westergren broke the news in a blog post:
This is a very sad day for Pandora, and for me personally. Today we reduced our staff from 140 to 120 employees. Like virtually every company, Pandora is not immune to the challenges presented by the current economic turmoil. We are trying to react quickly and responsibly to the new environment.
. . . There are tough times ahead for the economy, but our listenership is growing rapidly, the Internet radio royalty rate resolution seems finally near, and the explosion of mobile devices like the iPhone are opening up a world of opportunity for internet radio to expand off the desktop. Moreover, our ad sales are growing so well that, not only did we not make any reductions there, we need to continue to hire more.
It’s just hard to be excited about all that today.
In addition to Pandora, other startups that decided to cut back on headcount so far this month include Jive, AdBrite, Hi5, Seesmic, and Zivity. And eBay laid off more than 1,000 people.
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I sure hope those 20 people get career outplacement support or funds to help their job search along
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Funniest comment of the month…
Tim is an exemplary CEO. His vision has helped him persevere when others doubted him. I have no doubt that Pandora will chug through this economic downturn. I just hope that Arringtons “sacrificial lamb” prediction doesn’t come true. Keep it up Tim and the remaining team members!
http://www.tech...crificial-lamb/
Why doesn’t Pandora just charge “premium” users $2/month? That would cure all of their financial woes. Surely an “exemplary CEO” should have thought of that.
If it were only that easy
It’s exactly that easy. It couldn’t be easier. If people like Pandora that much, I’m sure they’d be willing to pay the cost of a cup of coffee to keep it alive.
Also, they could embed ads in their streams, just like in terrestrial radio, but they don’t do that either.
I don’t understand why the management at Pandora is unwilling to make Pandora solvent.
He’s not the CEO.
Interesting! Thanks. I did not know that . I know hes the founder and hes still involved. I just figured he was the CEO….Thanks for the correction.
Any indication what types of positions were rif’ed?
@TC: Do you fear the relevance of TechCrunch to diminish now that ’startups’ isn’t only wowie-zowie anymore?
(serious question)
such is the events to take place in our dying economy.
http://gatesand...s.blogspot.com/
Wow, I didn’t know they had so many employees.
I’m really hoping the rumors I heard a month or two ago that Pandora might shut down because of increasing royalties are false… Pandora is an amazing service.
Agreed. I’m surprised they had that many too. Much love to Pandora. Their service is awesome.
TC, the new FC ! How about a new site only for this type of news … good time to start FC again
charge 9.99 a month. done.
No one will pay that. People wouldn’t even pay that for Pandora AND unlimited iTunes subscription.
Apple should buy Pandora and keep it free. The other option, as mentioned above, is to charge a monthly fee. I’d pay for it, because it’s awesome. No reason not to charge for the service. Why keep it free, if it truly rocks? Is there any information that would suggest that people would flee, if a premium service were introduced? Worse case scenario, Pandora tests the water and finds a price point that sustains longevity. It’s really quite nice.
“Apple should buy Pandora”
I think they kind of circumvented the need to use Pandora with the Genius feature… (I’m pleading ignorance if Pandora is the technology behind Genius). I had been hoping for a long time to be able to apply the same sort of technology that Pandora uses to my iPod… Plus, since we can’t use Pandora in Canada anymore I miss it.
I would happy to pay 4.99 to 9.99 a month for premium service. Or listen through 30 second ads every 5 or so songs to keep pandora alive and well. One of the best sites to come alone in a long time.
A brief audio ad every few songs could also make them quite a bit more money. If radio can run 10 minutes of ads per hour, I think users would tolerate 1-2 minutes per hour on Pandora. Especially if the choice is – tolerate minimal audio advertising or lose one of the best music services on the web b/c they don’t have a sustainable business model.
Who’s next? Napster?
here comes another bubble ………….
I would pay for it. In fact I would pay for quite a few services that are free. For example one of many peoples favorites is mint.com. After hearing about them in Forbes I checked out the site, signed up, and have been a loyal patron since May. I even wrote the team to tell them not to be afraid to charge for the service in addition to their current model.
I’d be interested to know what everyone else thinks about the trade off between having paying customers and a drop in the total amount of free service users.
Not if they are data mining the living shit out of me.
Still only trimming the fat… No one is going out of business yet. Seems most of these layoffs are to cut burn rates…
Who is the first startup that is going to fold?
learn from this crisis, usa!
The cold winter of the financial crisis is comming!!
I’m surprised about the high number of employees some of these companies used to have
hope we see better times than these.