Clubhouse is a startup behind an audio app that grew in popularity amidst the pandemic. It managed to pull in familiar names for its live audio events which further catapulted them to success. However, it appears that it is short-lived as they are already cutting their staff by half.
Clubhouse Layoffs
The company expressed that they will be saying goodbye to "many talented, dedicated teammates" as they reduce the workforce by over 50% and that it would not have been done if not absolutely necessary.
Founders Paul Davidson and Rohan Seth stated that they tried to remain operational with the company's current number of employees, but it has become difficult to convey strategy to "cross-functional" teams that are improving only 1% every day.
Making changes has become complicated given that each aspect is handled by a different team, and the employees working remotely have made it harder to coordinate with particular tasks. This urged the company to make some changes through a "reset."
Certain roles will be dissolved and they will be reassigned to smaller, product-focused teams. The company has gone out of its way to try and provide support to those who are leaving Clubhouse by providing severance.
The support will include severance pay, where the company will pay the affected employees' salaries for the rest of April along with four more months of additional severance, meaning that full salaries will still be disbursed by August 31st.
Departing employees will also have access to healthcare through August 31st. Clubhouse will pay for COBRA, allowing the impacted to have full healthcare coverage for them, as well as their families during the severance period.
Company-issued laptops can also be kept by the employees so it can help them do research and move forward with their careers, which the company will also help with. Clubhouse will connect them to other companies and provide references for support.
Impacted employees can even submit information on what the company can help them with to transition to a new role. Clubhouse will assist with employees who are on working visas as well, which they will explain further in a company meeting.
Clubhouse's Success
The audio app was launched back in 2020 and since then, it has had famous names sign up such as Elon Musk, Mark Zuckerberg, Oprah Winfrey, and more. The list goes on known professors, engineers, comedians, and politicians.
Initially, the app was only available for iOS devices. It was after a year that its availability extended to Android devices. It was not easy to join the community since you will have to be invited by a Clubhouse member.
This strategy may seem counterproductive to draw in revenue, since the more users you have, the more you earn, yet Clubhouse managed to use its exclusivity to its favor. After a while, it had over six million users, resulting in the company's $4 billion value, as mentioned in Work In Progress.
It also helped that the pandemic left people with nothing to do, so they turned to other forms of entertainment, and one of those is listening to Clubhouse's live audio chat. However, as the pandemic died down, Clubhouse started to struggle, just as many other tech companies did.
