New round of Pandora layoffs partly driven by cost of doing business in CA
- Pandora, the internet radio station, laid off 5% of its staff, Business Insider reports. CEO Roger Lynch said the Oakland, CA-based company will also expand operations in Atlanta, where the cost of doing business is cheaper. The company expects to keep its headquarters in Oakland.
- The layoffs will affect employees in six offices across the country, says Business Insider. The staff reduction is expected to save the company $45 million a year, while the plan itself will cost between $6.5 million to $8.5 million in severance and benefit costs.
- This is the first major announcement of layoffs at Pandora since a restructuring effort affected 7% of its workforce in January 2017, the report noted.
Pandora's decision to expand operations in Atlanta feeds speculation about tech companies' intention to move further away from Silicon Valley (and California generally). Business costs in the area alone have gone up due to the state's well-established compliance burden, not to mention real estate values.
Workers in the tech sector are feeling the pain, too — so much so that one San Francisco startup, Zapier, is giving its employees a $10,000 bonus just to move out of the Bay Area. Zapier CEO Wade Foster cited cost-of-living expenses for the company's working families as a key motivator behind the decision, saying it would open up opportunities for remote work.
Overall, hiring growth in the Valley has slowed in recent years, according to data from state labor officials, while an increasing share of tech sector job candidates are looking past the area for new jobs in cities like Boston, Houston and Austin. A majority of those tech workers looking for new jobs do not believe that working in Silicon Valley is "important" for their careers, an analysis from Indeed shows.
The migration has also been driven by a rise in competitive benefits offerings from firms in other areas of the country, including Wall Street, where companies have raised their parental leave benefits in order to compete with those on the West Coast. What's more, local training locations for tech careers have sprung up across the country, from Utah to North Carolina, adding to the skilled talent available in other regions.
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