Spotify founder Daniel Ek is planning to officially step down from the role of chief executive after two decades at the helm of the music streaming giant.

The company said the 42-year-old would be replaced by his two deputies at the end of the year, while he remains on as executive chairman, setting long-term strategy for the firm.

It said the arrangement would formalise how the company has operated since 2023, when Mr Ek turned over a large portion of day-to-day management.

In a letter to staff, Mr Ek said he would remain “deeply involved” in big decisions involving the firm, one of Europe’s most successful technology businesses, boasting more than 700 million monthly users globally.

When it was founded in Sweden in 2006, Spotify said it aimed to address widespread piracy issues that were plaguing the music industry, using advertising and money from subscriptions to pay rights holders for music popular on the platform.

Its grip on listeners has grown as it expanded into podcasts and audio books, though the firm’s dominance has prompted frequent clashes with musicians, who have criticised its payment practices.

The company’s rise has also turned Mr Ek into a billionaire, with a fortune of about $10bn.

He has ploughed some of those riches into a European venture capital firm, which has backed firms such as Germany’s Helsing, which develops weapons systems powered by artificial intelligence.

This investment in Helsing, which Ek also leads as executive chairman, prompted some artists, including Deerhoof and Massive Attack, to launch a boycott of Spotify earlier this year.

Announcing its decision last month, Massive Attack said Spotify had long placed an “economic burden” on artists, which was “now compounded by a moral and ethical burden, whereby the hard-earned money of fans and the creative endeavours of musicians ultimately funds lethal, dystopian technologies”.

“Enough is more than enough,” the band said.

Spotify said the decision by Mr Ek to stand down had been in the works before the recent controversy and was not related.

The move will elevate co-presidents Gustav Söderström and Alex Norström, who have each been with the company for more than 15 years and had taken on enhanced responsibilities two years ago.

Mr Söderström currently serves as chief product and technology officer, while Mr Norström is the firm’s chief business officer.

Announcing the decision, Mr Ek said the change “simply matches titles to how we already operate”.

The co-chief executives will continue to report to him, and Mr Ek said he expected to remain more involved as executive chairman than is typical at American firms, reflecting what the company described as a more European approach.

“For most of you, very little will change,” he wrote in the letter to staff.

“What changes is my time and focus. As executive chairman, I will spend more of my time on the long arc: strategy, capital allocation, regulatory efforts and the calls that will shape the next decade for Spotify.”

Shares sank more than 4% in opening trade after news of the decision, which will come into effect at the end of the year.