Clubhouse joins tech giants in jobs cull as part of a ‘reset’

Clubhouse, the San Francisco-based social media app founded by Paul Davison and Rohan Seth, has announced that it is scaling back its organisation by 50%, blaming a change in customer habits post Covid.

Clubhouse offers listeners a series of audio rooms where they can listen to and participate in conversations about different topics.

The app flourished at time when people were home-bound during the pandemic as users tuned in to discussions on music, films, media, business and technology.

At the height of its popularity the app was valued at $4bn and is currently backed by more than $100m of venture capital.

However, in a statement on its site the cofounders acknowledged that a ‘reset’ was required, to serve the way people consume live audio now.

“The world has opened post-Covid, it’s become harder for many people to find their friends on Clubhouse and to fit long conversations into their daily lives. To find its role in the world, the product needs to evolve. This requires a period of change,” the owners stated.

The founders also hinted that expanding its team, then trying to manage it remotely, was challenging.

“It’s difficult for us to communicate the strategy to cross-functional teams when it’s evolving by 1% each day, or to make quick changes when each surface is owned by a different product squad.

“Being remote has made this especially challenging for us. The result is that its hard for teams to coordinate, people feel blocked by us, and brilliant, creative people are left underutilized”

To fix this, the founders concluded, there needed to be a “reset” to take it down to a smaller, product focussed team.

The world still needs live audio conversations, they claimed, as an antidote to “remote living, empty scrolling and Zoom meetings” and, with a smaller focussed product team, they added that they would be working on “Clubhouse 2.0”.

Clubhouse did not state the number of employees impacted by the layoffs, though it was reported that the company had around 100 employees as of last October.

Davison has admitted in the past that Clubhouse “grew way, way too fast” and, following its success, inevitable copycat features by larger platforms followed: Twitter Spaces, Facebook Live Audio Rooms, Spotify Greenroom and Amazon’s Project Mic.

Whether the social audio is worthy of its own app or whether it will go the way of other lockdown chat apps such as Houseparty remains to be seen.

Houseparty’s owner Epic Games has said that former Houseparty team is now working on a social interaction app for the metaverse – so it will be interesting to see what Davison and Seth’s app can offer users of Clubhouse’s next iteration.