Jun 14, 2024 13:09:00

VRChat cuts team size by 30%, lays off employees

VRChat, which operates the communication service of the same name, has decided to lay off many employees. The email sent by CEO Graham Gaylor to all employees has been made public on the official forum.

An Email from our CEO - Official / Official Notes - VRChat Ask Forum

https://ask.vrchat.com/t/an-email-from-our-ceo/25060

According to CEO Gaylor, VRChat had problems with overemployment and poor talent management, and management felt that 'the current team size was too large to support the health and growth of the business.' In an email, CEO Gaylor said, 'We are very sad to announce that we are reducing the size of our team by approximately 30%, and in the process, we will be saying goodbye to many talented team members. This is the most difficult change we have made at VRChat, and (co-founder) Jesse (Joudry) and I take full responsibility for the decision to get to this point.'

According to CEO Gaylor, VRChat was previously a 'flat organization' where most of the members were '

individual contributors (professionals without management responsibilities)'. The company grew in this form until 2022 along with the growth of the market, but since then, the growth level has slowed and the organization has become bloated relative to revenue and product size. Although the company worked on many ideas and projects as a business, things did not go smoothly because there was no management layer to coordinate everyone toward the same goal.

After putting in place a new management team, the company decided that the current fundraising environment was tough and that it would likely struggle to raise funds unless it significantly improved its indicators. As it came up with a five-year plan to balance profitability and business growth, it reportedly came to the tough conclusion that it would have to cut its team by about 30%.

Gaylor said that departing members will receive 12 weeks of basic severance pay, with additional severance pay based on years of service. In addition, medical insurance payments, stock option vesting, and job-hunting assistance will be provided. VRChat-specific rewards include lifetime use of the VRChat Plus subscription service, a badge showing that you worked for VRChat, and reduced fees for retirees who want to start a business with VRChat.

'Our departures weren't chosen for their quality, but simply reflect a changing business and marketplace,' said Gaylor. 'We wouldn't be where we are today without your passion, dedication and creativity. While nothing can replace the loss of your jobs, we will do our best to treat departing team members as courteously as possible and assist them in their transition to their next jobs.'