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Clubhouse Cuts Over Half of Its Employees Amid Drop in Usership

The founders aim to evolve the product to find its role in the world, while laid-off employees will receive a severance payment and keep their company-issued laptops

Clubhouse Cuts Over Half of Its Employees Amid Drop in Usership

Outlook Start-Up Desk

POSTED ON April 28, 2023 11:45 AM

Clubhouse, the social media platform that gained popularity during the COVID-19 pandemic, has announced that it is laying off more than half of its employees. While Clubhouse gained attention from influential venture capitalists and celebrities such as Oprah and Elon Musk, the app experienced a significant decrease in users shortly after its initial launch.

The exact number of employees who will be let go was not disclosed, but according to LinkedIn, the company has around 200 employees. The start-up had discussed a valuation of $4 billion with investors earlier this year but saw a sharp decline in user numbers once COVID-19 restrictions were lifted.

According to a statement by co-founders Paul Davison and Rohan Seth, Clubhouse struggled to retain users as people’s lives began to return to normal. The founders wrote, “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… To find its role in the world, the product needs to evolve. This requires a period of change.”

Laid-off employees will be allowed to keep their company-issued laptops and the company will pay four months of severance. Davison has a history of creating social apps that utilise new technology to connect people, but his past creations, such as Highlight, experienced a similar spike in popularity before rapidly losing traction.

Clubhouse initially brought people together in a sense of community but also saw the rise of hate speech and anti-semitic content. To combat these issues, Clubhouse introduced more private social groups, called Houses, to encourage a more friendly and intimate experience for users.

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