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Rdio to streamline workforce

By | Published on Wednesday 20 November 2013

Rdio

Digital music company Rdio is downsizing its workforce, with a source telling TechCrunch that about 35 staff members are likely to go, reducing the firm’s overall headcount between a fifth and a third.

Rdio, of course, is operating in a very competitive marketplace where, in the main, even the market leaders are losing money, with founders and early investors all hoping that the overall customer-base for subscription-based fully on-demand streaming music will grow big time in the coming years (while relying on expensive global expansion and mobile bundling deals to boost user figures in the short term).

Although the Rdio company hasn’t commented on how many jobs will go, it has confirmed cuts are incoming, with a spokesperson pulling out their big book of management babble and declaring that the company could confirm it had made “workforce reductions yesterday to improve cost structure and ensure a scalable business model for the long term”.

Analysts will likely wonder whether the cutbacks at Rdio are a sign of mounting pressures across the wider streaming music sector as investors get increasingly cautious about when exactly this business will become profitable. US-based Rhapsody also recently announced some redundancies.

It could simply be a sign that Rdio, which has been less forthcoming with user figures than many of its competitors, is losing the race, with Spotify and Deezer leading in Europe, and the interactive-radio style services like Pandora, iHeartRadio and iTunes Radio dominating in the US.

Or, if you are being generous, perhaps Rdio management are wary of letting costs get out of control just to convince Wall Street that they’re the next multi-billion dollar tech flotation in waiting, and instead are acting now to ensure long-term viability. Or, as you might put it, are simply seeking to “improve cost structure and ensure a scalable business model for the long-term”.



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