Discord cuts 17% of its staff amid rapid growth and strategic shift

Discord, the popular messaging platform for gamers and other communities, announced on Thursday that it is laying off 170 employees, or 17% of its total workforce. The decision was made to “sharpen our focus and improve the way we work together to bring more agility to our organization”, according to CEO Jason Citron.

Discord was founded in 2015 as a voice and text chat app for gamers, but it soon expanded to other niches and interests, such as education, music, art, and socializing. The platform now has over 150 million monthly active users and 19 million servers, where users can join and create channels for various topics and activities.

The company has also raised about $1 billion in funding from investors, including a $500 million round in December 2021 that valued the company at $15 billion. Discord has a cash balance of over $700 million and aims to achieve profitability this year.

Discord cuts 17% of its staff amid rapid growth and strategic shift
Discord cuts 17% of its staff amid rapid growth and strategic shift

However, Discord’s rapid growth also brought some challenges and inefficiencies, as the company took on more projects and expanded its workforce by five times since 2020. Citron said in an internal memo obtained by The Verge that the company needed to “face some hard truths” and make some tough decisions to better serve its users, business, and mission.

Discord’s layoffs and future plans

Citron announced the layoffs in an all-hands meeting and an internal memo on Thursday, saying that the affected employees would receive individual emails by 10:30 a.m. PT to confirm the impact on their employment. He also outlined the severance package for the departing staff, which includes:

  • Five months of salary
  • Benefit continuation
  • Health coverage for 2024
  • Three months of outplacement services
  • Equity vesting of awards scheduled for February 1, 2024

Citron also thanked the departing employees for their contributions and said that he was “deeply grateful” for their work. He said that the remaining employees would regroup in the afternoon to discuss the future of the company and how to improve its focus and agility.

Discord’s layoffs are part of a broader trend of tech companies cutting their staff amid the pandemic and changing market conditions. Earlier this week, Twitch, the live streaming platform owned by Amazon, announced that it was laying off 500 employees, or 35% of its workforce. Unity, the game engine maker, also said that it would lay off 25% of its staff soon.

Despite the layoffs, Discord seems to have a strong position in the market, as it continues to attract users and investors. The company reportedly rejected a $12 billion acquisition offer from Microsoft in 2021 and is considering going public in the future. Discord also plans to launch new features and products, such as a music streaming service, a video game store, and a subscription service called Nitro.

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