Clubhouse, the once-popular social audio app, has laid off more than half of its staff due to changing customer habits in a post-COVID world and remote work complexities.
The startup’s co-founders, Paul Davison and Rohan Seth, made the decision in response to the challenges that arise from overhiring and managing a remote work environment. The layoffs come less than a year after the company last laid off a portion of its staff as part of another restructuring.
The affected employees will receive severance and continued healthcare coverage for the next few months, but the company declined to comment on the exact number of people impacted or the number of employees who remain at the company. Last October, Davison told TechCrunch that Clubhouse had close to 100 employees.
Clubhouse, which was once valued at $4 billion by investors, including Andreessen Horowitz, Tiger Global, and Elad Gil, took a different tone in today’s larger layoff. In a blog post, the co-founders wrote that “as the world has opened up post-Covid, it’s become harder for many people to find their friends on Clubhouse and to fit long conversations into their daily lives. To find its role in the world, the product needs to evolve.”
The co-founders went on to explain that the business has tried to change with its current team size, but it has been unable to do so due to the size of the team. “It’s difficult for us to communicate the strategy to cross-functional teams when it’s evolving by 1% each day, or to make quick changes when each surface is owned by a different product squad. Being remote has made this especially challenging for us.”
The smaller team that remains at Clubhouse will be focused on building “Clubhouse 2.0,” the next version of the app. The co-founders believe that with a smaller, leaner team, they will be able to iterate faster on the details and build the right product. Clubhouse investors expressed not yet knowing what the remaining team is cooking up, but the company confirmed that it has “years of runway left” and is not enacting a hiring freeze as of yet.
While the layoff news is undoubtedly disappointing for those affected, it may be a necessary step for Clubhouse to refocus and evolve in a changing post-pandemic world. The app’s co-founders remain optimistic, and as Davison shared onstage last year, “When things are hard, you say we’re going to figure this out.”