Rhapsody said President John Irwin is stepping down amid a 15% cut in the company’s staff, as the music streaming service struggles to compete with rivals like Pandora (NYSE:P).
The Seattle-based company also announced Columbus Nova Technology Partners, an investment firm that owns “Rock Band” developer Harmonix, is now a significant shareholder in Rhapsody.
Technology news website The Verge first reported the moves on Monday.
The layoffs cover staff in the U.S. and will leave Rhapsody with about 200 employees globally.
As part of the restructuring, Rhapsody hired former Starbucks strategy executive Ethan Rudin to serve as chief financial officer, replacing Adi Dehejia.
During the search for a new CEO, Rhapsody will be run by a committee of current executives, including Rudin. Irwin will remain with the company as a strategic adviser.
“We are grateful to Jon Irwin for his leadership contributions and also want to thank those employees we've had to let go today for their hard work and commitment to Rhapsody,” said Columbus’s Jason Epstein, who joined Rhapsody’s board of directors.
Rhapsody was one of the first subscription services that offered access to streaming music, and in late 2011, the company bought rival Napster. But the company has struggled to keep up with more popular services like Pandora, which offers a subscription package as well as a free service supported by advertising.
Pandora said Monday it plans to raise up to about $279 million in a share offering. The company recently named Brian McAndrews as its new CEO.
Another music provider, Rdio, revealed that Cumulus Media (NASDAQ:CMLS) purchased a minority stake. Cumulus, which owns more than 400 radio stations, recently came to a $260 million deal to buy Dial Global, one of the nation’s largest syndicators of radio programming.