VRChat virtual universe creator sacks third of staff

The creators of VRChat, a popular online virtual world, have quoted lack of management, over-hiring, and the need for different talent as key drivers behind the decision.

One of the key reasons to reduce the number of staff by 30 percent is that the company has been “a flat organization” for too long, VRChat’s CEO Graham Gaylor said in an email to employees.

According to Gaylor, without adequate management, the company struggled to focus and align talent with the company’s growth.

“We saw incredible growth in 2021-2022 and, in anticipation of continued growth, scaled our IC team significantly. The reality was different. Not only did we not maintain 2021 levels of growth, we shrank year over year,” the CEO’s letter said.

Gaylor explained that a smaller user base combined with a scaled team led to an oversized organization. The CEO said that with proper management in place, the company has settled on its five-year strategy, hinting at tough times ahead.

“The current fundraising environment is tough, and we’ll likely struggle to fundraise without greatly improved metrics,” Gaylor explained.

First launched in 2014, VRChat was the pioneer in introducing virtual reality sets for world-building. The platform allows users to build worlds and interact with each other via user-created avatars.

VRChat experienced an almost twofold growth during the COVID-19 pandemic, but its user base dropped after the global lockdown passed.