Tech Layoffs: Clubhouse fires 50% of employees in favour of a smaller, leaner team

Clubhouse, the audio-based social networking app, has announced that it is laying off over 50 per cent of its workforce. In a note sent to employees, co-founders Paul Davison and Rohan Seth stated that the move was necessary to reset the company and focus on a smaller, product-focused team.

Clubhouse will provide departing employees with severance pay, equity acceleration, healthcare coverage, and career and immigration support. The company also plans to allow impacted employees to keep their company-issued laptops to help them research and apply for new roles.

The founders explained the move in a letter to the employees. The memo to employees read, "In order to fix this we need to reset the company, eliminate roles and take it down to a smaller, product-focused team. We arrived at this conclusion reluctantly, as we have years of runway remaining and do not feel immediate pressure to reduce costs. But we believe that a smaller team will give us focus and speed, and help us launch the next evolution of the product."

The company will pay salaries for the rest of April, plus four months of additional severance for all departing employees. Additionally, Clubhouse will pay for COBRA through August 31, 2023, for everyone affected, so they can continue to receive full healthcare coverage for themselves and their families during this period.

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The company hopes that with a smaller, leaner team, it will be able to iterate faster and build the right product for Clubhouse 2.0.

Despite the layoffs, Davison and Seth claim that the company is still committed to its vision of build a better product. The vision for Clubhouse 2.0 will aim to iterate faster and build the right product.