Clubhouse, a popular audio app during the COVID-19 pandemic, will be laying off employees as part of a company “reset,” according to an announcement by the startup.
In a letter shared by Clubhouse founders Paul Davison and Rohan Seth, they stated that the company will be undergoing a “significant scaling down” of over 50% of its workforce.
Interestingly, Davison and Seth mentioned that the company, which was reportedly valued at $4 billion in 2021, still has sufficient funding for “several years to come.” Clubhouse also added that they “do not feel any immediate pressure to reduce costs.”
Clubhouse became extremely popular in early 2021 when many people felt socially isolated due to the COVID-19 pandemic. The app attracted big names like Elon Musk and Oprah in live audio chats, which helped bolster its early success.
However, Davison later admitted that the growth happened “too fast,” and app usage declined as competitors began to emulate the service and more people returned to their normal activities as the pandemic subsided.
The founders then stated that they will be focusing on “Clubhouse 2.0,” although they did not explain what the service will entail, only that it will be built by a “smaller team.”
Clubhouse is not the only live audio service to encounter difficulties. Spotify recently shut down its own live audio app, Greenroom. And Reddit shut down its live audio chat service, Reddit Talk, in March. Even Amazon and Meta have struggled to make some of their audio projects work.
