Clubhouse Cuts More Than Half of Its Staff Amid User Slump
Clubhouse, the audio-based social platform, is undergoing a massive downsizing. The company, which first launched during the early days of the pandemic in April 2020, is now letting go of more than half of its workforce. This decision comes after the app lost some of its popularity and struggled to attract new users a year into its existence.
Initially, Clubhouse was invite-only and highly coveted, but that didn’t last long. The newly announced staff cuts may not be surprising given the company’s recent struggles, but they are certainly significant for a company that emerged so recently. Clubhouse founders Paul Davison and Rohan Seth wrote in a memo to staff and a public blog post that they are “scaling back our org by over 50% and saying goodbye to many talented, dedicated teammates in the process.” The founders expressed deep regret at having to take this step, but felt it was necessary.
In their post, Davison and Seth acknowledged that Clubhouse’s model of curated virtual conversations was uniquely suited to the era of COVID-19 lockdowns. However, as the world has opened up and people are able to see their friends in person, it has become more difficult for users to find time for long conversations on the app. Therefore, the company is planning a product transition, and far fewer workers will be needed to maintain and build Clubhouse’s future.
Davison and Seth cited remote work as a hindrance to Clubhouse’s ability to evolve, and stated that a smaller team would provide more focus and speed. They also made it clear that the layoffs were not an issue of cost but simply a matter of efficiency. The company reportedly has years of runway remaining and does not feel any immediate pressure to reduce costs.
Employees who were let go will receive four months of severance, paid-for COBRA through the end of August, and some other departure benefits. They will also get to keep their work laptops. Despite these benefits, being let go from the Clubhouse team is undoubtedly a difficult experience.
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