Recently, Discord announced a significant reduction in its workforce, affecting 17% of employees. The decision, announced by CEO Jason Citron, reflects a broader trend in the tech industry, where rapid expansion during the pandemic is giving way to a more cautious approach.
The layoffs at Discord will affect 170 people in various departments, the largest reduction in the company’s workforce to date. This follows a smaller round of layoffs last August. Citron’s message to employees outlining the decision indicates that the company is struggling with the problems of over-expansion. Since 2020, the number of Discord employees has grown fivefold, leading to inefficiencies and an unsustainable operating model.
Discord’s financial situation is challenging. Although the company has raised about $1 billion in funding and has more than $700 million in cash reserves, it is still striving for profitability. The surge in user growth during the pandemic has stalled, and Discord is now refocusing its strategy to become more lean and flexible.
This situation mirrors the overall situation in the tech industry, which is also experiencing a wave of layoffs, including recent cuts at giants such as Google and Amazon. These developments point to a reset in the tech sector, which previously showed uncontrolled growth and expansion.
For affected employees, Discord is offering significant support, including five months’ salary, continued benefits, job placement services and stock options. Citron’s announcement emphasizes the importance of supporting those who leave and recognizes their contributions to the company.