July 17, 2024

Discord Announces a 17% Workforce Cut

Popular communication service Discord has decided to trim its workforce by 17%, impacting 170 employees across various departments. The Verge reported that an internal memo and an all-hands meeting disclosed the decision.

Discord, initially launched in 2015, has been a dominant force in the gaming and esports industries, offering instant messaging and VoIP services. Its significance further surged during the COVID-19 pandemic, resulting in exponential growth. The company reached a valuation of $15 billion in 2021, following a successful $500 million funding round.

While Discord has made strides into esports by partnering with organisations like Tribe Gaming, its physical presence in the industry has remained relatively limited. Despite this, the platform has amassed an impressive 150 million monthly active users and secured around $1 billion in funding.

However, the winds of change have reached Discord’s shores, mirroring the broader tech industry trend of layoffs. The company previously made a 4% cut to its workforce in August of the preceding year. Other tech giants, including streaming platform Twitch, have also announced significant job cuts.

Discord’s CEO, Jason Citron, highlighted the company’s immense growth as a contributing factor to the decision. The workforce has expanded fivefold since 2020, leading to inefficiencies that Discord aims to rectify through the layoffs.

In an internal memo, Citron expressed the reasoning behind the cuts, stating that the company’s rapid growth over the last four years has led to inefficiency, and we need to make more strategic decisions about our teams and size.

Despite the grim news, Discord seems committed to easing the transition for affected employees. The company offers a generous package, including five months of salary (with an additional week for every year of employment), five months of continued benefits, and more.

This development is a stark reminder that even tech giants are not immune to market dynamics and the evolving landscape. As Discord recalibrates its workforce, the industry watches closely, contemplating the broader implications of these strategic decisions on one of the gaming community’s most beloved platforms.