New Delhi: Clubhouse, the social audio platform that gained popularity during the Covid-19 pandemic, has announced that it is laying off more than 50% of its staff. The founders of Clubhouse, Paul Davison and Rohan Seth, said that they are scaling back and saying goodbye to many talented and dedicated teammates in the process. However, those affected will receive severance and continued healthcare coverage for the next few months.
Davison and Seth have stated that they are deeply sorry to be making this decision and would not be doing so if it wasn’t absolutely necessary. They plan to build Clubhouse 2.0 with a smaller, leaner team. The company was once valued at $4 billion by investors, including Andreessen Horowitz and Tiger Global. However, the company last year laid off a portion of its staff as part of a restructuring effort.
The founders of Clubhouse have promised to pay salaries for the rest of April and provide four months of additional severance for all departing employees. This means that everyone affected will receive their full salary until August 31, 2023. Furthermore, the company will allow everyone impacted to keep their company-issued laptops to help them research and apply for new roles.
Davison and Seth believe that a smaller, product-focused team will give them the focus and speed they need to launch the next evolution of the product. They have stated that they need to reset the company, eliminate roles, and take it down to a smaller, product-focused team.
The news of Clubhouse’s layoffs comes as a surprise to many, especially given the platform’s popularity during the pandemic. Clubhouse allowed people to connect with each other and participate in live audio conversations on a variety of topics. The app was particularly popular among the tech and business communities, with many high-profile figures participating in discussions.
Despite its popularity, Clubhouse faced competition from other social audio platforms such as Twitter Spaces and Spotify’s Greenroom. With the social audio space becoming increasingly crowded, it is clear that Clubhouse needs to make changes to remain competitive. The decision to lay off staff is a difficult one, but it may be necessary for the long-term success of the company.