Clubhouse, the app that was once a sensation in social audio, created by Paul Davison Rohan Seth et al, has now cut more than 50% of its staff. The cofounders decided to react to the changing customer behavior post-COVID, and remote working complications. according to a blog post.
The affected employees will continue to receive their healthcare coverage for the next two months and receive severance payment. A spokesperson from Clubhouse refused to comment on how many employees were affected by the reduction of the workforce today, or the number that remained at the company. Last October, Davison told TechCrunch that Clubhouse had close to 100 employees.
Layoffs come less than a year since the company last laid off a portion of staff as part of another restructuring. TechCrunch was told by the company that “a handful of individuals decided to pursue new opportunities and a limited number of positions were eliminated in order streamline our team.” We continue to hire for engineering, designer and product roles.
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 larger layoff.
“With the opening up of the world post Covid, many people are finding it harder to make friends on Clubhouse and to fit in lengthy conversations into their daily lives. In a blog post, the cofounders stated that the product had to evolve to find its place in society. They went on to say that despite the company’s efforts to adapt, it hasn’t been successful because of its size. It is difficult to communicate business strategy across functional teams when it changes 1% per day. Or to make quick changes when each surface has its own product squad. We have found this to be particularly difficult because we work remotely.
The cofounders, unlike most entrepreneurs, did mention the economy when announcing the layoffs. Clubhouse was created to address the problems that arise when companies overhire and have a remote work environment.
“Our belief is that as the world opens up, there will be a greater need for a place where friends can meet and have great conversations. I also think that an audio product is designed to be hands-free, designed so that you can multitask…I think the trends we’re building toward are permanent,” Davison shared onstage last year at TC Disrupt, offering a window into his product philosophy around social audio and remote work.
Onstage, he also addressed ongoing criticism and scrutiny regarding Clubhouse’s fallaway from hype. “The nice thing is that having done it several times before, you don’t get caught up in the hype. When things are going well you say, “That will come down.” When things are difficult you say “We’ll figure it out.”
Clubhouse will be focusing on building “Clubhouse 1.0”, in the future.
This is truer than ever, as remote living, scrolling with no content, and Zoom Meetings become more commonplace. In our post today, we describe a vision for what Clubhouse 2.0 could look like. We believe that a smaller team allows us to iterate faster on the details, create a better product, and honor our teammates who helped us get here. TechCrunch spoke to a number of Clubhouse investors and found that many didn’t have any idea what the rest was up to. Davison said Clubhouse was moving away “live broadcasting” from broadcasting to private rooms for internal conversations.
There is still time for the company to answer any questions. Clubhouse has confirmed they still have “years runway” and have now more because of today’s layoffs. A spokesperson confirmed that Clubhouse has not implemented an hiring ban.