Clubhouse, a popular social audio app, has decided to let go of more than half of its workers. Founders Paul Davison and Rohan Seth told Clubhouse employees about this choice in an official blog post.
As part of a bigger plan to reorganize and rethink the social audio app, a number of employees have been let go.
The social app, backed by more than $100 million in venture capital and estimated at $4 billion by investors including Andreessen Horowitz, Tiger Global, and Elad Gil, took a different approach to the widespread layoffs.
The social audio platform is looking for change and product innovation, particularly given that its numbers have been falling in recent years, even if its founders admitted that this latest layoff was a difficult decision to make.
Clubhouse reported a 60% drop in 2021. “Today we announced that we’re scaling back our organization by over 50% and bidding farewell to many talented, dedicated teammates in the process,” said the announcement. We regret this change, but it’s necessary.
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The clubhouse experiences hardships
Clubhouse was founded in the year 2020, during the height of the pandemic. The platform was designed to enable audio-based communication between users, much like live broadcasting. It was widely used, particularly after the epidemic forced individuals, families, and friends to rely on technology for ongoing communication.
In February 2021, it had over 10 million members, but after COVID and the world’s opening, people shifted to face-to-face interactions, making it more challenging for people to locate their friends on Clubhouse and fit lengthy chats into their daily routines.
According to the founders, the team found it difficult to continue with their present team size following the reduction, although this was unsuccessful in part because it is difficult to communicate the strategy with cross-functional teams as well as the drawbacks of working remotely.
Unlike other business owners and IT organizations, these co-founders did not mention the economy when announcing layoffs. Clubhouse looks to be solving the challenges of internal management and client satisfaction by overhiring and working remotely.
“To fix this,” the company’s founders said, “we need to reset the company, get rid of roles, and reduce the team to just one person who can focus on the product.” We had to make this choice because we have time and don’t have to worry about bills. With a smaller team, we’ll get the next offering out faster.
Support for the impacted employees
The notification states that the corporation has assembled an assistance package for affected employees. These are:
Severance pay: Impacted employees will receive an April salary and 4 months of supplemental severance for all departing employees.
Equity acceleration: Impacted employees will receive acceleration programmes until their vesting term in August 2023.
Healthcare: Clubhouse will pay for COBRA through August 31, 2023, giving impacted employees full healthcare coverage.
Work equipment: Affected employees can keep their company-issued laptops to research and apply for new jobs.
Career support: Career support programmes are included in the severance package, which includes referrals, references, and support.
Help with immigration: Those who are on visas will get help from Clubhouse.
Clubhouse 2.0
The remaining employees will rebuild the social media-famous Clubhouse as part of the restructuring.
“We have a clear vision for Clubhouse 2.0 and believe that with a smaller, leaner team, we can iterate faster on details, produce the right product, and honour our teammates who helped us get here, according to the blog post by the creators of Clubhouse.”
