Discord, the popular online community platform, has made the difficult decision to lay off approximately 170 employees, which accounts for 17% of its workforce. This move comes as the company grapples with the challenges of managing its rapid expansion and increasing inefficiency.
Key Takeaway
Discord’s decision to lay off 170 employees reflects the challenges of managing rapid growth and maintaining operational efficiency. The tech industry as a whole has seen a wave of layoffs, underscoring the complex dynamics of expansion and financial sustainability.
Blaming Over-Hiring and Rapid Expansion
In an internal memo obtained by the Verge, Discord CEO Jason Citron attributed the layoffs to the company’s over-hiring and rapid workforce expansion, which saw a fivefold increase since 2020. Citron acknowledged that the company’s accelerated growth led to taking on more projects and a subsequent decrease in operational efficiency. As a result, Discord is now focused on streamlining its operations and fostering greater agility within the organization.
Financial Struggles Despite Pandemic Growth
Despite experiencing significant growth during the pandemic, Discord continues to face financial challenges and has yet to achieve profitability. The company’s decision to downsize its workforce follows a previous restructuring in August 2020, when approximately 40 employees, primarily in marketing, design, and entertainment partnerships, were laid off.
Industry-Wide Layoffs
Discord’s announcement adds to a series of recent layoffs within the tech industry. Notably, video game engine Unity reduced its workforce by 1,800 employees, while Amazon-owned Twitch and Amazon’s Prime Video and MGM Studios also implemented significant staff reductions. Audible, an audiobook company under Amazon, also underwent a 5% workforce reduction.
