Once-Buzzy Audio Chat App Clubhouse Lays Off Half Its Employees

Clubhouse, the once-buzzy audio-based chat app that was positioned during the depths of the pandemic as the next big thing in social media, announced that it is cutting more than 50% of its staff. 

The initial exclusivity of the platform and its use by a number of high-profile tech luminaries and investors led the startup to raise more than $100 million at a reported $4 billion valuation, the vast majority of which was from Andreessen Horowitz. 

But as the pandemic became less of a shock and more a part of normal life—and as competitors like Twitter and LinkedIn rolled out their own audio-based services— the platform quickly lost steam. At its peak, Clubhouse reached around 10 million weekly active users. Most estimates now peg its user base at a mere fraction of that number. 

Bloomberg reported that in April of 2021 Twitter weighed a potential acquisition of the platform for around $4 billion.

The now-defunct tech publication Protocol reported that downloads fell 80% year-over-year between the first half of 2021 to the first half of 2022 and a number of high-level executives were heading for the exit.  

In a blog post and email sent to employees today, Clubhouse co-founders Paul Davison and Rohan Seth wrote that “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.“

Somewhat ironically, as it was stay-at-home orders that helped lead to the development and early growth of the company, the founders said that “being remote has made this especially challenging for us.”

The Clubhouse co-founders said the layoffs will lead to a “smaller, product-focused team” that will “give us focus and speed, and help us launch the next evolution of the product.”