Cameo Insiders Reveal Problems That Led to Brutal Layoffs at Startup

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  • Cameo terminated 87 employees on Wednesday, which was about a quarter of its staff.
  • After adding users rapidly during the pandemic, the company’s growth slowed, insiders said.
  • Laid-off staffers expressed stress and anger as they start to search for new jobs.

On Wednesday, after Cameo laid off roughly a quarter of its workforce, the startup’s CEO Steven Galanis sent a company-wide message to his remaining employees.

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“I’m around and available all night if anyone wants to chat 1X1,” he wrote, sharing his cell phone number with staffers in a


Slack

post, a copy of which was viewed by Insider.

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Galanis also turned to Twitter and LinkedIn to reflect on the “brutal day,” tweeting that he had made “the painful decision to let go of 87 beloved members of the Cameo Fameo,” and pitching them as top hires to future employers. 

The breezy posts did not sit well with several of the employees who had lost their jobs earlier that day.

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“I’m stressed. I’m annoyed. I’m pretty angry,” a former staff member who was part of the layoffs told Insider. “He’s getting all this positive traction on LinkedIn announcing that he’s let 87 people go, trying to manage bad press. It’s a mixed bag of emotions.”

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This former employee, along with five others Insider spoke with, asked that their name not be used to avoid damaging professional relationships. Their identities are known to Insider. 

Galanis declined to comment, referring Insider to LinkedIn posts from himself and Cameo’s Chief People Officer Melanie Steinbach.

A second laid-off staffer said their ability to reach out to coworkers on Slack and email was cut off abruptly after they were told they were being let go — a move they felt stood in contrast to the “Cameo Fameo” messaging Galanis was sharing publicly.

“It’s kind of just like you’re on the street now,” this person said. “You’re not a part of the family anymore.”

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A third former employee said there was concern among some staffers about the company spending in seemingly extravagant ways. The company has a “Cameo Villa” it’s leasing in Beverly Hills, and company president Arthur Leopold mentioned on Twitter a new office in New York City. Both are seemingly costs related to Cameo’s new efforts in events and Web3. 

A fourth employee who was part of the most recent layoffs said while he always thought the “Cameo Fameo” expression was “weird,” Galanis’ message did not bother him. 

“It’s just startup lingo,” this person said. “I didn’t take personal offense.”

Cameo’s round of layoffs came during a brutal week for tech employees, in which On Deck, Mural, Mainstreet, Vise, and Thrasio all announced they were reducing their workforces. Last month, Robinhood reduced its staff by 9%, while Fast, a once high-flying financial tech startup, shut down entirely. Venture investors have predicted many more layoffs as startups try to preserve cash amidst a suddenly volatile fundraising environment. 

“These are not the first startup layoffs we’ve witnessed, and I do not believe they will be the last,” said Mathias Schilling, the cofounder of Headline, which led Cameo’s $100 million funding round in March 2021. “While we cannot neglect the human costs of layoffs, we have to recognize that the alternatives to capital efficiency are companies absolving.”

At Cameo, some employees saw worrying signs

Cameo’s round of layoffs, first reported by The Information’s Kaya Yurieff, arrived at a moment when the buzzy startup appeared to be thriving.

Its funding round last year valued the company at just over a billion dollars and included marquee investors like Softbank and Kleiner Perkins as well as the venture arms of Amazon, Alphabet, and PayPal. 

“Headline led Cameo’s Series C investment because our firm recognized how the company was building a unique, market defining product and witnessing impressive growth,” Schilling said. “We still wholeheartedly believe in Cameo’s vision and recognize the need for companies to balance costs with cash reserves.”

Cameo gained a slew of new users and fans across the entertainment industry as in-person events shut down and performers moved online during the pandemic. Earlier this week, the startup even announced a new partnership with Snapchat to connect Snap’s advertisers with Cameo’s talent pool.  

But internally, there were warning signs that the company was struggling, four former employees said.

The fourth former employee compared Cameo to Instacart, which surged in popularity during lockdowns but was unable to sustain demand when life returned to normal.

“The reality is that the pandemic was 4.5x growth for the business,” this person said, adding that growth slowed last year. “The hiring rate exceeded the growth rate.”

Executives had always prided themselves on being transparent but within the last six weeks stopped sharing performance metrics in weekly company all-hands, three former staffers said.

“I knew that the company was struggling financially, and to be honest, I thought if it continues this way probably by the end of the year that something like this may happen,” the second former employee said. 

Over the past six months, people who left were increasingly not replaced and the company became much more strict about which roles it filled, according to two former employees.

The third former employee said there was also considerable internal discussion about and frustration with Cameo’s decision to include “Tinder Swindler” Simon Leviev on its “new and noteworthy” roster of talent, which drew outrage on social media.

Cameo both internally and externally defended its decision to feature Leviev, saying “customers were in control” of the platform, but the third former employee said the ordeal left them with the impression that “this place is kind of a mess.”

It’s not the first time Cameo has had mass layoffs

Cameo’s recent layoffs targeted many of its most senior executives, international employees, as well as members of its talent marketing and music team, four former staffers said.

Matthew Bailey, the company’s UK and Ireland head, asked his LinkedIn network if they had tips for “a new opportunity to get my teeth into.” Another former exec, Sydney Hubbard, highlighted that her team, the music division, had been hit hard in a LinkedIn post. Other layoffs included the company’s CTO, SVP of marketing, chief product officer, and chief people officer, Protocol’s Janko Roettgers first reported. 

A Cameo rep told Insider the company had given eight weeks of severance, but two staffers who were laid off said they had only gotten one week of pay.

“I’ve been on the job hunt since yesterday afternoon,” the first former employee said on Thursday, the day after they were laid off.

“A lot of us have rent and mortgages to pay, kids, and everything like that,” the second former staffer said.

Wednesday’s round of layoffs wasn’t the first time this had happened at Cameo. 

Cameo laid off 22 staffers in 2019, which the company said was under 15% of its total workforce at the time. The fifth former staffer referred to that event as “The Red Wedding,” a nod to the infamous Game of Thrones episode where many characters were slaughtered unexpectedly.

“There seems to be a pattern here where they just keep over-hiring and then just get rid of them,” the second former employee said.





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