Music streaming service TIDAL has laid off 10% of its workforce as part of a broader cost-saving strategy implemented by its parent company, Block Inc.
Job cuts affecting about 40 employees were reported by Bloomberg on Thursday (December 7), citing people familiar with the move. A portion of the company’s curation team that builds playlists was reportedly let go.
“We do not take these decisions lightly, and we are sincerely grateful for the contributions of our impacted teammates,” a TIDAL spokesperson said in an email cited by Bloomberg.
The company was previously owned by rapper Jay-Z through holding company Project Panther Bidco, and was acquired in 2021 by Block, which was founded by Jack Dorsey of Twitter fame and Jim McKelvey.
The job reductions follow a letter to investors written by Dorsey in November, saying Block will cap its payroll at 12,000 employees.
“As we continue to view the business through the lens of our investment framework, we continue to find opportunities for constraints we believe will lead to greater growth. We implemented one of these a year before our IPO: an absolute cap on the number of people we had at the company,” Dorsey wrote in the letter.
“We do not take these decisions lightly, and we are sincerely grateful for the contributions of our impacted teammates.”
The company had over 13,000 employees by the end of Q3 2023. It aims to reduce its workforce by the end of 2024 “until we feel the growth of the business has meaningfully outpaced the growth of the company,” Dorsey wrote.
TIDAL and its parent company made significant moves in recent months. In October, Block acquired business and financial management platform HIFI. Launched in the US in 2020 with backers like Matt Pincus, HIFI describes itself as a “financial rights organization” that builds products and services “that work in concert with them to financially empower the creator class.”
In July, TIDAL raised its subscription prices following similar moves by Apple Music, Amazon Music and Deezer. Spotify would follow with its own price hikes shortly thereafter. That came after TIDAL CEO Jesse Dorogusker shared his thoughts with MBW that “music is relatively undervalued and underpriced.”
The layoffs at TIDAL follow similar staff reductions at Spotify, which announced a 17% workforce reduction on Monday (December 4). Both companies cited the need to reduce operating costs as the reason for the cuts.
The layoffs at TIDAL and Spotify represent a wider trend within the tech industry. Numerous other major tech companies, including Amazon, Google and Meta, have implemented significant staff reductions over the past year.
This wave of layoffs underscores the current economic uncertainty and the pressure tech companies are facing to adapt to changing market conditions.
Techcrunch reported earlier this week that the tech industry slashed more than 240,000 jobs in 2023 alone, up 50% from a year earlier.
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