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At the beginning of the pandemic, there weren’t many apps hotter than Clubhouse. People scrambled to get an invitation to the audio-based social platform and big names used it for all sorts of public discussions.
The novelty has long since worn off, however, and on Thursday the company announced it would be laying off half of its workers as it struggles to survive.
“We’re deeply sorry to be doing this, and we would not be making this change if we didn’t feel it was absolutely necessary,” founders Paul Davison and Rohan Seth wrote in an email to employees.
The dramatic cuts come as the audience for Clubhouse, which was one trapped inside during COVID isolation, has a much wider array of entertainment and educational options available to them now, along with the ability to meet friends in person once again.
Davison and Seth said the company’s finances were not the reason behind the cuts. (Nine months after its launch, it saw its valuation hit $1 billion.) Instead, they said they felt Clubhouse needed to evolve, quickly—and it couldn’t do so with the current staff count. “We have years of runway remaining and do not feel immediate pressure to reduce costs,” the note read.
Affected employees will be paid through Aug. 31, accelerated vesting, career and immigration support and paid healthcare through the end of August.
“As the world has opened up post-Covid, it’s become harder for many people to find their friends on Clubhouse and to fit long conversations into their daily lives,” the founders wrote. “To find its role in the world, the product needs to evolve. This requires a period of change.”
