Discord proves to be the latest company to lay off its employees for 2024, cutting approximately 170 or 17% of its employees in different departments. Discord CEO Jason Citron is reportedly blaming the company's growth, which has expanded as much as five times its size since 2020, rather than financial straits, as per the Verge.
The Verge says the cut-offs were confirmed via an internal document they could obtain and an all-hands meeting today that revealed the layoffs to the staff. The cut-offs are expected to affect 170 employees in different departments.
As per a New York Times report on the same story, this reasoning proves to be similar in the past from tech chief executives, like Mark Zuckerberg of Meta and Daniel Ek of Spotify, who carried out layoffs during the previous two years.
As per the memo, Citron reportedly wrote that the company needs to face the "hard truths" as it is becoming increasingly apparent that the corporation has grown too quickly, becoming less efficient in its operations.
Discord's Woes
Discord, as per the Verge, has yet to turn a profit and is currently working to boost user growth following a spike during the epidemic. This situation was also stated in Citron's letter to the staff members.
The popular online messaging platform was reportedly valued at around $15 billion in 2021 at the height of the tech boom. In 2022, the market for high-risk technology had a significant contraction due to increased interest rates and skyrocketing inflation, which hindered expansion and increased capital expenses.
This proves to be also identical to last year for the popular messaging platform as Tech Crunch states that as part of a corporate reorganization, Discord let go of approximately 40 workers, or 4% of its workforce, in August of last year, mainly impacted people working in marketing, design, and entertainment partnerships.
This 17% downsizing is Discord's most extensive layoffs the chat service has ever seen. Since turning down a $12 billion purchase offer from Microsoft in 2021, the firm has reported that it has been considering going public.
Latest Tech Layoffs
The reports state that this latest round of layoffs for Discord follows a string of tech layoffs plaguing the tech industry for quite some time now, such as when hundreds of employees in Google's core engineering division were let go on Wednesday. Other layoffs included those working on the voice-activated virtual assistant Google Assistant.
Also, on Wednesday, Amazon let off hundreds of employees at MGM Studios, Prime Video, and its Twitch streaming service. This month, Xerox said it will reduce its workforce by 15%, totaling 23,000 employees.
CNBC also reports that security company Trend Micro announced it would reduce 2% of its worldwide personnel earlier this week, while Unity Software announced it would lay off 25% of its workers.
