Pandora to Slash Nearly 400 Jobs

RAPAPORT... Pandora plans to lay off 397 employees after disappointing second-quarterresults and a weakened outlook for the rest of the year. While sales grew 4% in local currencies to $748.2 million(DKK 4.82 billion) for the quarter, the retailer lowered its revenue guidancefor the year to an increase of 4% to 7%, from its previous forecast of 7% to10%. It also expects lower profit margins, after that measure declined in thesecond quarter, it said Monday. The company's stock price was down 21% at presstime Tuesday. Streamlining the business will help Pandora's financialperformance by reducing complexity and shifting resources to strategicpriorities such as digital and e-commerce sales, CEO Anders Colding Friisexplained in a separate statement Tuesday. Pandora has nearly doubled in sizein the past three years, with new organizational practices emerging indifferent parts of the company, the executive added.The changes willreduce costs by about $23.3 million (DKK 150 million) per year, the companysaid. "The adjustments are...necessary to protect our profitability,"Colding Friis said. "Sadly, the changes mean that good employees will losetheir jobs, and we are supporting them in the best possible way." Of the layoffs, 218 will be in Thailand, where Pandoraemploys 13,000 people, including 5,000 ata new manufacturing center it unveiled in June. The company's global workforcenumbers 27,000. Pandora has suffered from weak demand for its products in the US, aswell as competition from unauthorized traders in the Asia-Pacific region. Lastmonth, it said it had reduced retail prices in China to combat the grey market,in which other companies sell its products without a license. Meanwhile, Pandora has appointed Sid Keswani as president forthe Americas. Keswani is a former CEO of grocery-store chain Fiesta Mart, and replacesScott Burger, who left the company in January. He will begin on August 13,reporting directly to the CEO. Pandora will release its full results for the second quarteron August 9. Image: Pandora