Jack Dorsey recently informed employees at Tidal, the music streaming service owned by Block, that the company is preparing for another substantial round of layoffs. Dorsey, who serves as CEO of Block, stated in a memo on Wednesday that Tidal needs to embrace a “startup mentality” once again. According to Dorsey, operating with a much smaller, leaner team is necessary to meet the demands of this new approach. In his note, Dorsey explained that Tidal would be focusing heavily on engineering and design while completely cutting its product management and product marketing departments. He noted that the design team would be downsized, along with foundational roles that support Tidal’s operations. Dorsey added that while engineering roles would remain for now, there could be additional reductions in that department over the next few weeks, depending on clarity around future leadership decisions.

Jack Dorsey has not detailed an exact figure for the upcoming layoffs at Tidal, but internal sources estimate that as many as 100 employees may lose their jobs, equating to approximately 25% of the current workforce. This is the second significant downsizing Tidal has experienced within a year, following a prior reduction in December 2023, when the company cut around 10% of its workforce. This latest restructuring is part of a larger strategic shift that Dorsey hinted at in July. During that announcement, he shared with Block employees that he aimed to return the company to its early-stage roots, embracing a leaner and more agile approach akin to that of a startup.

The decision to reduce the workforce aligns with Dorsey’s broader vision for Tidal as a more focused, efficient organization. In his communication with employees, Dorsey emphasized the importance of prioritizing engineering and design as core functions, while removing roles related to product management and product marketing. According to Dorsey, these changes are necessary to reorient Tidal toward a more streamlined approach that centers on product development and artist engagement, enabling the company to be nimble in a competitive music streaming industry dominated by major players like Spotify and Apple Music.

Dorsey’s restructuring approach signals a shift from Tidal’s previous operational model, where product management and marketing played a substantial role. By reducing these functions and condensing the design team, Dorsey aims to foster a team culture that is laser-focused on Tidal’s most critical priorities. Dorsey’s statement also suggests that the engineering team could face further reductions in the coming weeks, depending on the organization’s evolving leadership structure.

Block acquired a majority stake in Tidal in 2021 for an estimated $300 million, with the original goal of providing artists with a platform to connect directly with fans while maintaining control over their music and earnings. However, the service has struggled to compete effectively with larger platforms, a challenge that was further highlighted when a shareholder lawsuit questioned the acquisition’s value. Although the lawsuit was ultimately dismissed, the acquisition was widely criticized as a questionable business decision, adding pressure for Tidal to justify its place within Block’s portfolio.

In light of these changes, a spokesperson for Tidal provided a statement to Fortune, indicating that the recent layoffs are intended to position Tidal as a more focused and agile organization dedicated to “serving artists in the most meaningful way.” The spokesperson underscored Tidal’s renewed commitment to innovation and noted that by concentrating on fewer, high-impact initiatives, the company is aiming to deliver an enhanced experience for both artists and listeners. This streamlined approach is expected to allow Tidal to better respond to industry demands and the needs of its audience, moving forward with a more targeted strategy.

Block’s acquisition of Tidal in 2021 was initially seen as a move to bring new energy to the music streaming industry. Dorsey’s company paid approximately $300 million for a majority stake in Tidal, a platform originally founded by rapper and entrepreneur Jay-Z. Despite initial optimism, Tidal has faced significant challenges in establishing itself as a major player in an industry dominated by competitors like Spotify and Apple Music. In 2023, a shareholder lawsuit was filed against Block, claiming the Tidal acquisition was not in the company’s best interests. Although the lawsuit was dismissed, the presiding judge noted that the deal seemed, by all accounts, to be “a terrible business decision,” further highlighting the acquisition’s perceived risks.

A Tidal spokesperson spoke to Fortune about the recent layoffs, stating that these internal changes align with the company’s evolving strategy to serve artists in more impactful ways. The spokesperson noted that Tidal is recalibrating its operations, becoming a more focused and agile organization with a leaner team dedicated to advancing core objectives. By narrowing its focus, Tidal aims to foster a relentless approach to product development, centered around innovation and quality. This shift is intended to empower the platform to better address the evolving needs of both artists and listeners, reinforcing its commitment to a streamlined approach that can adapt quickly to changes within the competitive streaming industry.