Discord, the popular chat app, is the latest tech company to conduct major layoffs, cutting 17% of its workforce. CEO Jason Citron framed the move as “sharpening our focus” and improving efficiency, but the troubling trend of ballooning headcounts and subsequent job cuts raises questions about the company’s direction.
“Today we are making the unfortunate and difficult decision to reduce the size of Discord’s workforce by 17%. This means we are saying goodbye to 170 of our talented colleagues” Citron said, in a memo passed to all employees. “This is a decision we did not take lightly, but it is one that we have conviction in to better serve our users, our business and our mission over the long term.“
While Discord still has over $700 million in cash reserves, profitability remains elusive despite nearly $1 billion in funding. The pandemic brought a temporary surge in growth, but Discord has struggled to sustain momentum after rejecting Microsoft’s $12 billion buyout offer last year.
Citron’s memo admitted ” we took on more projects and became less efficient in how we operated” after quadrupling employees since 2020. The layoffs impacted 170 employees across multiple divisions. While Citron maintained that Discord is not facing financial duress, the job losses indicate leadership loosened the reins on spending for too long.
“We are increasingly clear on the need to sharpen our focus and improve the way we work together to bring more agility to our organization. This is what largely drove the decision to reduce the size of our workforce.” Citron’s memo continues. “While difficult, I am confident this will put us in the best position to continue building a strong and profitable business that delivers amazing products for our users and supports our mission for years to come.“
Now Citron’s Discord joins the growing list of tech firms realizing their breakneck hiring was unsustainable. Trimming costs through layoffs has become an oft-repeated mistake in the industry. This is also bolstered by Google laying off hundreds of employees from its digital assistant, hardware, and engineering teams as part of a broader effort to cut costs and prioritize efforts related to artificial intelligence and Amazon’s hiring and firing woes between Prime and Twitch.
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Discord continues weighing a public offering to raise funds, but questions linger whether it can straighten its course after overexpansion. Shedding nearly 20% of corporate staff hints at deeper issues plaguing the company. Citron’s memo shares what will be happening:
While portrayed as strategic readjustment, the cutbacks primarily show that Discord fell prey to the same troubles as others in tech – careless growth without fiscal discipline. For affected employees, Citron’s promises to learn from missteps ring hollow. “It’s incredibly difficult to say goodbye to respected peers, many of whom have become friends. I’m hopeful that working on and with our product has reinforced that these bonds can be sustained and even strengthened beyond the “walls” of any one place.” Citron’s memo concludes. “Take care of yourselves and let’s look out for each other through this particularly challenging time.”
What do you think about all these tech giants laying off a significant number of employees? Let us know in the comments!
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