Another economic casualty, Pandora is the latest in a long line of Internet companies to let go of employees, announcing plans to trim 14 percent of the music discovery startup's work force.
“This is a very sad day for Pandora, and for me personally,” Pandora CEO Tim Westergren wrote in a blog Thursday. “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.”
The layoffs announcement comes as the future of the resilient nine-year-old music recommendation and Internet radio startup appeared brighter than ever.
Pandora and its Music genome Project, which helps its listeners discover new artists based on analysis of the music they like, nearly died in-utero when the dot-com bubble burst in 2000.
In one of his blogs, Mr. Westergren recollects how he and his then 40 employees, most of them musicians, worked for months without being paid.
But the Oakland, California-based company hadn’t fought its toughest battle yet.
In April of last year a ruling from the Copyright Royalty Board in Washington, D.C., moved to triple the licensing fees for Internet radio sites like Pandora, requiring the startup to pay more than 70 percent of its revenue to the Recording Industry Association of America.
“The survival of Pandora and all of Internet radio is in jeopardy because of the decision,” Mr. Westergren wrote at the time in an email to all Pandora’s users, pleading them to react.
And they did. In just a week, more than 200,000 zealous Pandora listeners had contacted their congressional representatives and prompted the introduction of a bill, the Internet Radio Equality Act, to fix the problem.
Despite layoffs, the outlook is finally starting to look brighter for the startup. The Internet royalty rate resolution is about to end, and the company is experiencing explosive growth.
The launch last summer of a mobile Pandora app for Apple's iPhone--the 10th most popular, free application in the app store--helped the company double its customer base to more than 16 million.
It seems like Mr. Westergren and his team can finally catch their breath.
“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,” Mr. Wintergreen said in his blog.
Moreover, the company’s ad sales are growing so well that it seeks to hire more salespeople.
“It’s just hard to be excited about all that today,” wrote Mr. Westergren, whose company is joining the growing list of web startups getting rid off employees to face tough times.
In October, startups AdBrite, SiriusXM, Hi5, Seesmic, Jive, and Zivity let go of a total of 160 people.