Boss Daniel Ek - who takes "full accountability for the moves" that got the company in its present position - has insisted he was "too ambitious in investing ahead of our revenue growth".
The music streaming giant has around 10,000 employees, meaning roughly 600 jobs are at risk.
On the company's blog, Ek wrote: "While we have made great progress in improving speed in the last few years, we haven’t focused as much on improving efficiency.
"We still spend far too much time syncing on slightly different strategies, which slows us down. And in a challenging economic environment, efficiency takes on greater importance.
"So, in an effort to drive more efficiency, control costs, and speed up decision-making, I have decided to restructure our organization."
On top of trimming the workforce, another measure will see the company centralise the "majority of [its] engineering and product work under Gustav as Chief Product Officer and the business areas under Alex as Chief Business Officer", as well as co-presidents.
It means Dawn Ostroff "has decided to depart Spotify", while she will "assume the role of senior advisor to help facilitate this transition", while "Alex will take on the responsibility for the content, advertising and licensing work going forward".
The move comes as companies across the tech world - including Microsoft and Alphabet, which owns Google - have also made widespread cuts.