Jack Dorsey, CEO of Block Inc., has informed Tidal employees of impending job cuts, marking the second wave of layoffs within a year at the music streaming platform.
Dorsey announced that Tidal will operate with a leaner structure, emphasizing engineering and design over product management and marketing roles.
Insiders anticipate that as many as 100 employees—roughly a quarter of Tidal’s workforce—could be affected by these cuts.
This restructuring aligns with Dorsey’s intent to streamline operations across Block’s holdings, particularly within Tidal, acquired by Block in 2021 for approximately $300 million.
Tidal’s shift towards an engineering-led team
Dorsey’s memo to staff outlined the decision to eliminate certain roles, especially in product management and marketing, while retaining a focus on engineering and design.
This strategic refocus, according to the CEO, will allow Tidal to operate more like a startup and enhance its competitiveness in a market dominated by Spotify and Apple Music.
The changes also include potential reductions in design support roles, and streamlining foundational positions that maintain Tidal’s infrastructure.
Over the coming weeks, Dorsey noted, the company may consider further cuts as leadership assesses necessary roles and structures.
Block’s broader restructuring goals
This layoff wave follows Dorsey’s July reorganization message to Block’s staff, where he hinted at making Block “resemble its early days.”
Since acquiring a majority stake in Tidal, Dorsey has faced scrutiny over Block’s decision to enter the competitive music streaming market.
Despite Tidal’s initial appeal, driven by founder Jay-Z’s artist-centric approach, the platform has struggled to gain a strong market share.
The latest job cuts underscore the ongoing challenges facing Tidal in carving out a distinct identity and path to profitability within Block’s larger portfolio.
Block’s 2021 acquisition of Tidal has been criticized as a “challenging business decision” due to Tidal’s limited market penetration and high-profile competition.
In 2023, a shareholder lawsuit challenging the acquisition was dismissed in court; however, the judge acknowledged the acquisition’s perceived risks.
The additional layoffs may be part of Block’s strategy to minimize overhead costs and restructure Tidal as a more streamlined division, helping it to focus on “serving artists in the most meaningful way” and increasing Tidal’s value to Block’s broader vision.
Competitive pressure from Spotify and Apple Music
Tidal’s challenges are further compounded by the competitive landscape. Spotify and Apple Music continue to dominate global music streaming, making it difficult for smaller players like Tidal to establish a distinctive edge.
With subscription fees and artist royalties on the rise, Tidal’s restructuring may allow it to allocate resources more effectively.
By shedding non-essential roles and concentrating on core services, Tidal could streamline its costs and focus its efforts on distinguishing itself from industry giants through exclusive artist collaborations and niche offerings.
Sources close to the company estimate that approximately 100 employees, or nearly 25% of Tidal’s workforce, could be impacted by this restructuring phase.
This follows a 10% staff reduction in December 2023, signaling Block’s commitment to a leaner operation within its music streaming business.
These cuts represent another move to stabilize Tidal’s finances as Block seeks to enhance operational efficiency and focus on profit-driving roles.
Tidal’s remaining staff will likely bear expanded responsibilities as the company seeks to fulfill Dorsey’s streamlined vision.
As Block continues to reshape its holdings, Tidal’s future may hinge on its ability to achieve stability and carve out a profitable niche in music streaming.
The upcoming changes may place Tidal on a more sustainable footing within Block’s broader fintech portfolio.
Dorsey’s emphasis on agility and a smaller team at Tidal may ultimately reflect his larger vision for the platform to transition toward a profitable, artist-focused service.
Nevertheless, the continued layoffs indicate Block’s need to balance innovation with fiscal prudence as it supports Tidal’s ongoing challenges in the streaming sector.
The post Jack Dorsey announces mass layoffs at Tidal, aims to ‘build like a startup again’ appeared first on Invezz
