Clubhouse, a once-rocketing social audio app created by Paul Davison and Rohan Seth, has laid off more than half its staff. The startup’s co-founders made the decision in response to changing customer habits in a post-COVID world and the complexities of remote work, according to a blog post.
Those who were affected will receive severance pay and continued healthcare coverage for the next few months. A Clubhouse spokesperson declined to comment on the number of people affected by today’s workforce reduction or the number of employees remaining with the company. Last October, Davison told TechCrunch that Clubhouse had close to 100 employees.
The layoffs come less than a year since the company last laid off some staff as part of another restructuring. The company then told TechCrunch that “some people decided to look at new opportunities and some roles were eliminated as part of our team optimization. We continue to recruit for roles in engineering, product and design.”
The social app, backed with more than $100 million in venture capital and once valued at $4 billion by investors including Andreessen Horowitz, Tiger Global and Elad Gil, took a different tone in today’s biggest layoff.
“As the world has opened up after Covid, it has become more difficult for many people to find their friends in the Clubhouse and have long conversations in their daily lives. To find its role in the world, the product must evolve,” the co-founders wrote in a blog post. They went on to write that the company has tried to change with their current team size, but has been unable to due to the size of the team. “It’s hard for us to communicate strategy to cross-functional teams when it’s evolving 1% every day, or to make rapid changes when each surface is owned by a different product team. Being remote has made this especially challenging for us.”
Unlike many employers, the co-founders did not mention the economy when announcing the layoffs. Instead, Clubhouse seems to be responding to the complexities that arise from over-hiring and a remote work environment, both in running a business internally and creating something people want externally.
“Our belief is that as the world opens up, a couple of things will happen: there will be a more acute need to have a place where you can go and be among friends, meet their friends and have good conversations. I also believe that an audio product is designed to be hands-free, designed to allow you to multitask… I think the trends we’re building towards are permanent,” Davison shared onstage last year at TC Disrupt, offering a window to your product. philosophy around social audio and remote work.
On stage, he also responded to the ongoing criticism and scrutiny surrounding the fall of the Clubhouse hype. “The nice thing about having done this a few times before is that you tend not to get caught up in your own hype. When things are going like a gang bang, you say that’s going to happen when, when things are tough, you say we’re going to figure this out.”
Going forward, the smaller Clubhouse team will focus on building “Clubhouse 2.0.”
“As remote living, empty commuting, and Zoom meetings become more commonplace, this is truer than ever. We have a clear vision of what Clubhouse 2.0 looks like, and we believe that with a smaller, more agile team we will be able to iterate on the details faster, build the right product, and honor our teammates who helped us get here.” blog today. he says. TechCrunch has reached out to several Clubhouse investors, with many expressing that they don’t yet know what the remaining team is cooking up. Last year, Davison mentioned the move of Clubhouse activity away from “live podcasting” and streaming behavior toward private rooms, intimidating internal conversations.
The company is still in time to offer more answers. Clubhouse did confirm that he has “track years” left and now has more as a result of today’s layoffs. The company is not enacting a hiring freeze at this time, a spokesman said.
Those with knowledge of Clubhouse can contact Natasha Mascarenhas on Twitter @nmasc_ or on Signal at +1 925 271 0912. Requests for anonymity will be respected.