We consider a degree-corrected planted-partition model: a random graph on $n$ nodes with two equal-sized clusters. The model parameters are two constants $a,b > 0$ and an i.i.d. sequence $(\phi_i)_{i=1}^n$, with second moment $\Phi^2$. Vertices $i$ and $j$ are joined by an edge with probability $\frac{\phi_i \phi_j}{n}a$ whenever they are in the same class and with probability $\frac{\phi_i \phi_j}{n}b$ otherwise. We prove that the underlying community structure cannot be accurately recovered from observations of the graph when $(a-b)^2 \Phi^2 \leq 2(a+b)$.