Once-hot chat startup Clubhouse is cutting half of staff

Clubhouse. — Photo by William Krause on Unsplash

Clubhouse, the pandemic-era social media sensation, is cutting more than half of its employees, the company said in a blog post on April 27. Clubhouse attracted attention from an elite stable of venture capitalists, but saw usership drop precipitously not long after its buzzy launch.

The company didn’t disclose the total number of people who were cut. In October, co-founder Paul Davison said the company had about 100 employees and still had “years of cash in the bank”.

Clubhouse was a hit at the height of the Covid-19 pandemic, drawing celebrities like Oprah and Elon Musk into long audio conversations with hundreds of people on the app. In 2021, it discussed a US$4bil (RM17.83bil) valuation with investors. But once lockdowns eased, user numbers fell quickly and the startup shifted its strategy.

“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,” Clubhouse co-founders Davison and Rohan Seth wrote in the post. “To find its role in the world, the product needs to evolve. This requires a period of change.”

They also said that the startup would allow laid-off employees to keep their company-issued laptops and would pay four months of severance.

Clubhouse co-founder Davison has long been obsessed with making social apps that use new technology tools – like real-time location or live audio broadcasting – to connect people with one another. Past creations of his, like Highlight, similarly spiked in interest before cooling quickly.

When users first flocked to Clubhouse, they found a sense of community but also brought some of the more unsavoury parts of the Internet: hate speech, including anti-Semitic content, and an unruly lack of moderation. By last summer, Clubhouse was experimenting with more private social groups, called Houses, in a bid to bring back a friendlier, more intimate feeling to the app. – Bloomberg

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