Clubhouse to lay off over 50% of staff amid ‘resetting’ of live audio app

Credit: Clubhouse

Social audio networking platform Clubhouse is letting go of over half of its employees as the company resets its teams to “a smaller, product-focused team.”

The layoffs were revealed by Clubhouse founders Paul Davison and Rohan Seth in an email to staff that was made public on Thursday (April 27).

“Today we announced that we’re scaling back our org by over 50% and saying goodbye to many talented, dedicated teammates in the process. We’re deeply sorry to be doing this, and we would not be making this change if we didn’t feel it was absolutely necessary,” the founders said.

While Clubhouse did not disclose how many roles are impacted, the 50% reduction could translate to nearly 50 roles as Davison told the TechCrunch Disrupt Conference in October 2022 that Clubhouse had nearly 100 employees.

At the time, Davison, the company’s CEO, said: “We had a couple of months of insane, silly, unsustainable 10x month-over-month growth.”

“I think what people might not appreciate is that Clubhouse has kind of moved into all of these different verticals, and they probably don’t appreciate the size of the community and the activity and the diversity and the range and all the conversations that are happening.”

The latest decision comes as the company acknowledged that it has “become harder for many people to find their friends on Clubhouse and to fit long conversations into their daily lives” post-COVID-19.

“To find its role in the world, the product needs to evolve. This requires a period of change,” Davison and Seth said.

Davison said both him and Seth have tried to “make this work” with the current size of Clubhouse’s team, although they weren’t able to do it effectively as each of the company’s cross-functional teams is managed by a different product squad.

Working with each team has also been a struggle amid the remote work setup, making it hard for teams to coordinate, with some creative staff feeling “underutilized,” Davison added.

Clubhouse was one of the early entrants in the live-audio space. Investors valued the startup at $4 billion in 2021 following its meteoric rise during the pandemic.

Its appeal attracted investments from Marc Andreessen’s venture firm, Andreessen Horowitz, Tiger Global and DST Global. However, as the COVID fad ebbed, Clubhouse is now rethinking its strategy.

Apart from Clubhouse, music streaming giant Spotify — which jumped into the live-audio space in 2021 following Clubhouse’s success — last month said it was shutting down its live audio app, Spotify Live, two years after launching it.

“After a period of experimentation and learnings around how Spotify users interact with live audio, we’ve made the decision to sunset the Spotify Live app,” the company said in a statement issued to multiple news sources.

Meanwhile, Twitter scaled back its Twitter Spaces. The platform was later shut down by Twitter’s new owner, Elon Musk. 

Meta-owned Facebook has also disclosed plans to scale back its investments in live audio, integrating its Live Audio Rooms service into its Facebook Live experience.

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