Clubhouse, a pioneer in live sound, is “resetting” and laying off 50% of its staff

Clubhouse, the live audio app that once garnered a lot of attention and interest for a multi-billion dollar acquisition, is “resetting” and laying off 50% of its workforce of a few dozen employees.

Founders Rohan Seth and Paul Davison sent out a memo to employees on Thursday to announce the news. “We are very sorry to have to do this and will not make this change unless we feel it is absolutely necessary,” they wrote.

In justifying what they described as a “restart” of the business, the pair cited the company’s reopening after the pandemic shutdown. “As the post-Covid world has opened up, it has become more difficult for many people to find their clubhouse friends and fit long conversations into their daily lives,” the memo added. “To find its place in the world, the product must develop. It requires a period of change.”

Clubhouse, along with Twitch and other live digital platforms, has played a role in disrupting the traditional media ecosystem, particularly in the conversational arena. Big names like Elon Must and Mark Zuckerberg have been attracted to Clubhouse, which launched its own program in 2021. That same year, the company raised $4 billion in cash and was followed by Twitter as a possible acquisition target. Eventually, bigger tech players like Twitter, Facebook, Discord and others simply copied the functionality of Clubhouse’s live audio service.

The go-go times were a lot to deal with for a fledgling company when you think about it. “Boy, I think we grew way too fast earlier this year,” Davison told Bloomberg at the time. “What we really want is to stay on this path of steady, gradual growth.”

Employees leaving Clubhouse will receive full pay through August and receive COBRA health care benefits, Seth and Davison said, with accelerated fundraising for those affected. You can also keep company laptops.

“We have a clear vision of what Clubhouse 2.0 looks like, and we believe that with a smaller, leaner team, we’ll be able to iterate more quickly on the details, build the right product, and honor our teammates who.. . helped get here,” the note concluded.