Clubhouse was initially launched to Beta testers in March 2020 and the app quickly gained popularity by the end of the year.
Social audio app Clubhouse, which gained popularity during Covid-19 times, has announced to lay off over 50% of its workforce. Unlike other companies that have laid off employees, Clubhouse founders Paul Davison and Rohan Seth did not cite global economic slowdown as the reason for this decision and blamed post-covid complexities and remote work environment.
“As the world has opened up post-Covid, it’s become harder for many people to find their friends on Clubhouse and to fit long conversations into their daily lives. To find its role in the world, the product needs to evolve. This requires a period of change,” the co-founders wrote in a blog.
“It’s difficult for us to communicate the strategy to cross-functional teams when it’s evolving by 1% each day, or to make quick changes when each surface is owned by a different product squad. Being remote has made this especially challenging for us,” they added.
The company has not given an exact number of affected employees or the cost of restructuring. But it did confirm that it has “years of runway remaining” and after the job cuts it does not feel immediate pressure to reduce costs.
Clubhouse said to pay salaries for the rest of April, along with four months of additional severance for all the impacted employees. Other benefits to departing employees include healthcare coverage till August 31, company-issued laptops, career and immigration support, etc.
For the path forward, a smaller, leaner Clubhouse team will work towards what they call Clubhouse 2.0. “As remote living, empty scrolling and Zoom meetings become more common, this is truer than ever. We have a clear vision for what Clubhouse 2.0 looks like and we believe that with a smaller, leaner team we will be able to iterate faster on the details, build the right product and honor our teammates who helped us get here,” Davison and Seth said.
Clubhouse was initially launched to Beta testers in March 2020 and the app quickly gained popularity by the end of the year. The social audio chat app was backed with more than $100 million in venture capital led by investors including Andreessen Horowitz, Tiger Global, and Elad Gil. The app is available on iOS and Android devices. While the app has been praised for its ability to facilitate authentic and spontaneous conversations among people from diverse backgrounds, Clubhouse has also been criticized for its lack of content moderation and the potential for misinformation.
Meanwhile, as a part of cost-cutting measures, several tech giants like Alphabet, Meta, Microsoft, Amazon, and others have also laid off thousands of employees since last year to gear up for a global economic slowdown. Just yesterday, American ride-hailing platform Lyft announced to lay off 26% of its workforce, impacting approximately 1,072 employees. E-commerce major Amazon also announced on Wednesday to shut down its health and wellness monitoring system Amazon Halo and said to further lay off some employees.
