Discord is laying off 17 percent of employees

Discord is laying off 17 percent of its staff, a move that CEO Jason Citron said is meant to “sharpen our focus and improve the way we work together to bring more agility to our organization.”

The cuts were announced today to employees in an all-hands meeting and internal memo I’ve obtained. They’ll impact 170 people across various departments. 

Based on Citron’s message to employees and my understanding of the business, Discord isn’t in dire financial straits, though it has yet to become profitable and is still trying to revive user growth after a surge during the pandemic. In his memo to employees, which you can read in full below, Citron said Discord grew its headcount too fast over the last few years — an admission that has become quite common among tech CEOs as of late.

“We grew quickly and expanded our workforce even faster, increasing by 5x since 2020,” Citron wrote. “As a result, we took on more projects and became less efficient in how we operated.”

These cuts are Discord’s largest to date after the messaging app laid off 4 percent of staff last August. They add to the layoffs that continue to sweep across the tech industry, including deep cuts at Google and Amazon just this week. 

Discord has raised a total of about $1 billion in funding. It has more than $700 million in cash on its balance sheet and the goal to become profitable this year, according to a person familiar with the matter. The company has been contemplating going public since it turned down a $12 billion acquisition offer from Microsoft in 2021, though I’m told it’s nowhere near close to doing so.

Here’s Citron’s full memo to employees announcing the layoffs:

Hi @everyone,

I want to follow up on what we just covered at our all-company meeting and share some context.

Today we are making the unfortunate and difficult decision to reduce the size of Discord’s workforce by 17%. This means we are saying goodbye to 170 of our talented colleagues. This is a decision we did not take lightly, but it is one that we have conviction in to better serve our users, our business and our mission over the long term.

Where we are and how we got here

Our company has changed and grown significantly over the past few years. We should all be really proud of what we’ve been able to accomplish together to serve the millions of people who turn to Discord every day to spend time with their friends. 

At the same time, we have to face some hard truths. We grew quickly and expanded our workforce even faster, increasing by 5x since 2020. As a result, we took on more projects and became less efficient in how we operated. 

Today, we are increasingly clear on the need to sharpen our focus and improve the way we work together to bring more agility to our organization. This is what largely drove the decision to reduce the size of our workforce. While difficult, I am confident this will put us in the best position to continue building a strong and profitable business that delivers amazing products for our users and supports our mission for years to come. 

What happens next

I’m sure all of you are anxious to know what this means for each of you.

- By 10:30 a.m. PT, everyone will receive an email. In your email, you will learn whether or not your employment has been impacted by this reduction-in-force

- Leadership will hold a meeting with departing team members at 11:00 a.m. PT to discuss next steps

- For all remaining employees, we will come back together this afternoon at 1:00 p.m. PT to talk about what’s next

How we’re taking care of our colleagues

It is incredibly important to me that we support departing team members through this difficult time and provide them with a sizable runway as they transition into future employment. To that end, we are offering them: 

- Five months of salary (plus an additional week for every full year at Discord)

- Five months of benefit continuation

- Three months of outplacement services

- Equity vesting of awards scheduled to vest on Feb. 1, 2024

- Continued access to Modern Health through the end of 2024, and more

I’ll end by sharing deep appreciation and gratitude for those leaving us. Discord is better because of your contributions and the passion you brought to delivering for our users, our company, and each other. Thank you for everything. 

It’s incredibly difficult to say goodbye to respected peers, many of whom have become friends. I’m hopeful that working on and with our product has reinforced that these bonds can be sustained and even strengthened beyond the “walls” of any one place. 

Take care of yourselves and let’s look out for each other through this particularly challenging time. 

Jason