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Clubhouse, the once-buzzy live audio app that has seen usage decline compared to its pandemic heyday, is laying off more than half of its staffers as the company’s co-founders seek to pare the organization back to a “smaller, product-focused team.”
In a letter shared publicly and with employees Thursday, Clubhouse co-founders Paul Davison and Rohan Seth said the company would be “scaling back” by more than 50 percent. A spokesperson for Clubhouse declined to share the exact number of employees impacted by the layoffs, though the company had around 100 employees as of last October.
“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,” Davison and Seth wrote.
In a tweet about the cuts, Davison, the CEO of Clubhouse, clarified that the layoffs were not a “financial decision” for the company, which has raised around $300 million in VC funding and most recently closed a notable Series C funding round in April 2021 with a16z at a $4 billion valuation.
The co-founders also acknowledged that Clubhouse’s usage has declined as COVID-related restrictions have been lifted, making it difficult for people to “fit long conversations into their daily lives.”
Though it’s not yet clear how Clubhouse will evolve, interest in live audio has notably cooled in the past years. Facebook and Reddit have both abandoned their live audio ventures; at the end of this month, Spotify is also set to shut down Spotify Live, the live audio app it had spent roughly $67.7 million in an acquisition to create as a response to the fervor around Clubhouse. Twitter Spaces still exists but has seen features disappear amid Twitter’s overall upheaval under Elon Musk.
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