Clubhouse, the once-popular live audio app, has announced that it will be laying off more than half of its employees in an effort to scale back and focus on a smaller, product-focused team. Co-founders Paul Davison and Rohan Seth made the announcement in a letter to employees and the public on Thursday, stating that they came to the conclusion reluctantly but believe that a smaller team will help them launch the next evolution of the product.
The exact number of employees impacted by the layoffs has not been shared, but the company had around 100 employees as of October 2022. Davison clarified in a tweet that the layoffs were not a financial decision, as the company has raised around $300 million in venture capital funding and most recently closed a notable Series C funding round in April 2023 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. While it’s unclear how Clubhouse will evolve, interest in live audio has notably cooled in recent years. Facebook and Reddit have both abandoned their live audio ventures, and Spotify is set to shut down Spotify Live, the live audio app it acquired for roughly $67.7 million, at the end of this month. Twitter Spaces still exists, but it has seen features disappear amid Twitter’s overall upheaval under Elon Musk.
Despite the challenges facing the live audio market, Clubhouse’s co-founders remain optimistic about the app’s future. In their letter, they noted that the company still has years of runway remaining and does not feel immediate pressure to reduce costs. By paring back and focusing on a smaller, product-focused team, they believe they can create a better experience for users and build a sustainable business for the long term.