Social audio app Clubhouse has announced plans to lay off 50 percent of its employees as it restructures the platform.
The company’s co-founders Paul Davison and Rohan Seth disclosed via a memo to employees that the layoff was necessitated to reset the company following a post-covid era.
The memo reads in part,
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“Today we announced that we’re scaling back our organization 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.
“If you are among those impacted, you will receive a calendar invite to a 1:1 meeting with a manager in your department within the next 10 minutes. In the meantime, we wanted to provide everyone with more context about why we made this decision and how we will be supporting the individuals who are departing.
“To fix this we need to reset the company, eliminate roles and take it down to a smaller, product-focused team. We arrived at this conclusion reluctantly, as we have years of runway remaining and do not feel immediate pressure to reduce costs. But we believe that a smaller team will give us focus and speed, and help us launch the next evolution of the product.”
The co-founders disclosed that as the world has opened up post-Covid, it has become harder for many people to find their friends on Clubhouse and to fit long conversations into their daily lives. Hence, to find its role in the current realities of today’s world, the product needs to evolve which requires a period of change.
Laid-off employees will receive severance pay as they will be paid salaries for the rest of April, plus 4 months of additional severance. This means everyone affected will receive their full salary until Aug 31, 2023.
Also, every laid-off employee will be allowed to keep their company-issued laptops, to help them research and apply for new roles. Unlike several tech companies that have downsized their workforce due to the recent economic downturn, Clubhouse did not cite any economic crisis while announcing layoffs. Instead, the company is responding to complexities that arose from overturning during the covid era
It is worth noting that Clubhouse first emerged as an invite-only app during the covid-19 pandemic lockdown in 2020. During this period the platform witnessed a surge in downloads as people were looking for ways to link up with friends.
Unfortunately, following the post-covid era, the app has been struggling to stay relevant. In a bid to evolve and adapt to the post-covid era, the app launched a feature called “Houses” last year August, which is a dedicated chat space where users can make new friends through their existing friend groups in a more intimate setting.