Clubhouse, a social audio app that has seen huge heights before, created by Paul Davison and Rohan Seth, has laid off more than half of its staff. The startup’s founders made the decision in response to changing customer habits in a post-COVID world and the complexities of remote working, according to a blog post.
Those affected will get severance and continued healthcare coverage for the next few months. A Clubhouse spokesperson declined to comment on how many people are affected by today’s workforce cuts or how many employees remain with the company. Last October, Davison told TechCrunch that Clubhouse has nearly 100 employees.
The layoffs come less than a year since the company laid off a portion of the staff as part of another restructuring. The company then told TechCrunch that “a few individuals have decided to pursue new opportunities and a few roles have been eliminated as part of a streamlining of our team. We are continuing to hire for roles in engineering, product, and design.”
The social app, backed by more than $100 million in venture capital and valued at $4 billion by investors including Andreessen Horowitz, Tiger Global and Elad Gill, has taken a different tack in today’s biggest layoffs.
“As the world has opened up post-Covid, it has become difficult for many people to find their Clubhouse friends and adapt long conversations into their daily lives. To find its role in the world, a product needs to evolve,” the co-founders wrote in a blog post. They went on to write that the company tried to change with the size of its current team but was unable to because of the size of the team. “It’s hard for us to communicate strategy to cross-functional teams when they’re growing at 1% every day, or to make quick changes when each deck is owned by a different product group. Being remote made this especially difficult for us.”
Unlike many entrepreneurs, the founders did not cite the economy when announcing layoffs. Instead, Clubhouse seems to respond to the complexities that arise from a remote listening and working environment, both in running the business internally and in building something people want externally.
“Our belief is that as the world opens up, two things will happen: There will be a great need for a place you can go and be with friends and meet with their friends and have great conversations. I also think an audio product designed to be hands-free, designed so you can multitask… I think The trends we’re building towards are permanent,” Davison shared on stage last year at TC Disrupt, providing a window into his product philosophy around social voice and remote work.
On stage, he has also responded to the constant criticism and scrutiny about Clubhouse falling into the hype. “The nice thing about doing it a few times before is that you don’t tend to get caught up in your own hype. When things are going gangbusters, you kind of say it’s going to go down when, when things are tough, you say we’ll figure it out.”
Going forward, the smaller Clubhouse team will focus on building “Clubhouse 2.0”.
“As remote living, blank scrolling and Zoom meetings become more common, this is truer than ever. We have a clear vision of what Clubhouse 2.0 looks like and believe that with a leaner and leaner team we will be able to iterate on the details faster, build the product fitting, and honoring our teammates who helped get us here,” today’s blog post reads. TechCrunch has reached out to a number of Clubhouse investors and many of them have expressed that they don’t yet know what the remaining team is preparing.
He still has time to provide more answers. Clubhouse confirmed that it has “years of scale left” and now has more as a result of today’s layoffs. A company spokesperson said the company has not yet frozen hiring.
Those with information on the Clubhouse can reach Natasha Mascarenhas on Twitter @nmasc_ or on Signal at +1 925 271 0912. Requests for anonymity will be respected.