“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,” said the founders.

Those impacted will receive severance and continued healthcare coverage for the next few months.

“We will pay salaries for the rest of April, plus 4 months of additional severance for all departing employees. This means everyone affected will receive their full salary until Aug 31, 2023,” said Davison and Seth. “We will allow everyone who is impacted to keep their company-issued laptops, to help them research and apply for new roles,” added the founders as they plan to build Clubhouse 2.0 with a smaller, leaner team. The app was once valued at $4 billion by investors, including Andreessen Horowitz and Tiger Global. The company last year laid off a portion of staff as part of restructuring.

“We need to reset the company, eliminate roles and take it down to a smaller, product-focused team. We believe that a smaller team will give us focus and speed, and help us launch the next evolution of the product,” the founders said.