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Agora, the solutions provider behind ClubHouse and HTC VIVE app, starts massive layoff

Zijing Fu

posted on November 1, 2022 8:30 pm

Agora Inc, the real-time audio and video solutions provider based in Shanghai, is undergoing a massive round of layoff, according to news media China Star Market. The company is letting go of 300-400 of its employees out of the total 900, with many being new recruits who graduated last year, according to an ex-Agora employee who posted her experience on Douyin.

The round started on October 24, the Programmers’ Day in China and caught people off guard, according to discussions on Douyin and MaiMai, a LinkedIn-like platform in China.

Agora has confirmed that the company is undergoing a structural adjustment to optimize the company’s operations, but denied the 30% lay-off ratio, according to Zidan Financial. However, according to a Douyin user who was part of the lay-off, around 300 people has entered an “Agora Graduates” group chat.

Public records show from 2019 to 2021, their total employees are increased from 447 to 842 and then 1,311. In 2020, Agora had 498 employees, including 282 R&D staff, which amounts to 57% of the total workforce. In 2021, Agora had 797 R&D staff, which is about 61% of the total workforce. According to the Douyin user, all sorts of positions at Agora are being cut in the round of lay-off, including R&D staff.

Agora Inc was founded by Tony Wang and Tony Zhao in 2013, and serve industries such as live streaming, online education, gaming, IoT, AR/VR, finance, and healthcare. Their real-time audio and video PasS service help companies enhance engagement and interactions in a variety of scenarios.

Agora is the technology services provider behind the hit social app ClubHouse and HTC’s VIVE Sync VR app. According to Seeking Alpha, Agora’s stock prices “doubled within a few weeks” after ClubHouse took off in 2021 and traded at above $90/share. Historical prices show the company once climbed to above $111/share in February 2021, which is more than five times of its $20 IPO price.

However, the company’s stock has been going downhill since then. Agora currently stands at under $3/share, and reached its new low on October 24 and October 25 from the previous $3 level to above $2.6. The company lost around 20% of its value in the past month.

The fluctuating stock prices and layoff all traces back to the company’s decrease in revenue. In the first and second quarter of 2020, Agora profited $3.266 million and $3.069 million respectively, but since then they have posted a consistent loss for the next eight quarters.

From the third quarter of 2020 to the second quarter of 2022, their net losses were: $2.295 million, $6.182 million, $14.69 million, $15.39 million, $21.1 million, $21.18 million, $26.94 million, and $30.68 million, respectively.

Their revenue growth rate has also been declining since the second quarter of 2020, showing 127.53%, 80.8%, 74.05%, 13.12%, 24.86%, 46%, 21.45%, -4.08% and -3.2%, respectively. The recent two quarters saw negative revenue growth.

Agora’s quarterly earnings for Q3 2020 is expected to be released between Nov 14, 2022 – Nov 18, 2022. “Analysts have forecast the company to bring in revenue of $40.08 million for the current quarter, with the likely lows of $39.76 million and highs of $40.37 million,” according to StockRegister.

The company is riding rough water partly due to the pull-back in China’s internet industry and complicated China-US relations, which brings conspiratorial voices to Agora’s data security issues.

An Agora spokesperson told PingWest in 2021 that “operating globally means that we must adhere to applicable law, regulation, industry practices, and standards in each region in which we conduct business."

Photo by Giorgio Grani on Unsplash