Clubhouse, Which Blazed A Trail In Live Audio, Is “Resetting” And Laying Off 50% Of Its Staff

Clubhouse, the live audio app that once drew big buzz and interest in a multi-billion-dollar takeover, is “resetting” and letting go of 50% of its staff of a few dozen workers.

Founders Rohan Seth and Paul Davison sent a memo to employees to break the news Thursday. “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,” they wrote.

Laying out their reasoning for what they called a “resetting” of the company, the pair cited the reopening of society after the shutdowns of the pandemic. “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 memo added. “To find its role in the world, the product needs to evolve. This requires a period of change.”

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Clubhouse, along with Twitch and other live digital platforms, played a role in disrupting the traditional media ecosystem, especially in the talk space. Major figures like Elon Must and Mark Zuckerberg were among those drawn to appear on Clubhouse, which launched original programming in 2021. That same year, the company raised funds at a $4 billion valuation and was pursued by Twitter as a possible takeover candidate. Eventually, larger 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 for an emerging company to process, upon reflection. “Boy, I think we grew way, way too fast earlier this year,” Davison told Bloomberg at the time. “What we really want to do is be on that path of steady, gradual growth.”

Employees departing Clubhouse will be paid full salaries and provided with COBRA health benefits through August, Seth and Davison said, with accelerated vesting of equity for those affected. They will also be able to keep company laptops.

“We have a clear vision for what Clubhouse 2.0 looks like and we believe that with a smaller, leaner team we will be able to iterate faster on the details, build the right product and honor our teammates who helped us get here,” the memo concluded.

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