Clubhouse cuts staff by over 50% to focus on product evolution

• ByStartupStory     |    April 28, 2023

In a move to “reset” the company, invite-only social audio app Clubhouse is reducing its workforce by more than 50%. Co-founders Paul Davison and Rohan Seth announced the news in an internal memo, which was later posted on the company’s blog. “We are downsizing our organization by more than 50% and bidding farewell to several skilled and committed teammates,” the memo stated.

The company has not disclosed the exact number of employees who will be affected. However, according to an internal memo posted on the company’s blog, Clubhouse is downsizing its workforce by more than 50%. Co-founders Paul Davison and Rohan Seth stated that this decision was not taken lightly since the company has sufficient funds and did not feel an immediate need to reduce costs. However, they believe that a smaller team will provide more focus and speed to help launch the next version of the product.

The memo explained, “As Covid restrictions have eased, it has become more challenging for users to locate their friends on Clubhouse and find the time for extended conversations. To keep up with the world’s needs, the product needs to transform, necessitating a period of transition.”

Clubhouse, a social audio app that was established in 2020, permits users to engage in discussions about technology, music, fashion, and other topics. The platform has hosted numerous celebrities and personalities, including Elon Musk, Mark Zuckerberg, Oprah Winfrey, and MC Hammer. The company garnered $10 million in funding in April 2021 from prominent venture capital firms like Andreessen Horowitz at a valuation of $4 billion.

According to the founders, the employees impacted by the layoffs will receive their pay and health care benefits until August and will be allowed to keep their laptops. “We understand there’s no ideal way to handle this, and this may not provide much comfort, but it’s essential to us that we make efforts to support departing employees and acknowledge the significance of their contributions to the company’s history,” they added.

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