Discord recently announced a significant reduction in its workforce, affecting 17% of its employees. This decision, communicated by CEO Jason Citron, reflects a broader trend in the tech industry, where rapid expansion during the pandemic years is giving way to a more cautious approach.
A total of 170 employees will be laid off across various departments
The layoffs at Discord impact 170 individuals across various departments, marking the company’s largest workforce reduction to date. This follows a smaller round of layoffs in August last year. Citron’s memo to employees, which outlines the decision, reveals a company grappling with the challenges of over-expansion. Since 2020, Discord’s workforce has grown fivefold, leading to inefficiencies and an unsustainable operational model.
Discord’s financial situation is complex. Despite having raised about $1 billion in funding and possessing over $700 million in cash reserves, the company is still striving for profitability. The surge in user growth during the pandemic has plateaued, and Discord is now refocusing its strategy to become leaner and more agile.
This situation mirrors the larger tech industry, which is also experiencing a wave of layoffs, including recent cuts at giants like Google and Amazon. These developments point to a recalibration in the tech sector, which had previously seen unchecked growth and expansion.
For the affected employees, Discord is offering considerable support, including five months of salary, continuation of benefits, outplacement services, and equity vesting. Citron’s memo emphasizes the importance of supporting those leaving and acknowledges the contributions they have made to the company.
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