Cameo conducts layoffs a year after hitting unicorn status

·4-min read

Cameo, a platform that allows fans to buy personalized videos from celebrities, has laid off 87 members of its staff, according to a tweet from CEO Steven Galanis. The layoffs, as first reported by The Information, impacted a quarter of the overall workforce and was a result of the company needing to balance costs with cash reserves.

"Today has been a brutal day at the office. I made the painful decision to let go of 87 beloved members of the Cameo Fameo," Galanis wrote on Twitter. "If you’re looking to hire hungry, humble, smart, kind, curious, learning machines who love to win — and you see Cameo on their resume — look no further." TechCrunch reached out to Cameo for further specifics but a spokesperson only provided the following statement from Galanis:

To support both fan and talent demand during the pandemic lockdowns, Cameo’s headcount exploded from just over 100 to nearly 400. We hired a lot of people quickly, and market conditions have rapidly changed since then. Accordingly, we have right-sized the business to best reflect the new realities.

The decision to reduce our headcount was a painful but necessary course correction to ensure that we regain focus as well as achieve the agility to navigate new challenges, the ability to optimize our financial resources, and time and space to nurture newer business segments like Cameo for Business, Represent and web3 that we believe will be as big as the core business that put us on the map. We are bullish on the intermediate and long-term future of Cameo, and the actions we have taken to balance our costs with our cash reserves will best position the company to take full advantage of those growth opportunities.

A number of recently laid off employees spoke to TechCrunch, on the condition of anonymity, about the cuts. They say that teams across all organizations were impacted, including the C-suite roles of chief product officer, chief people officer, vice president of marketing and the CTO. Severance packages were offered to employees, including eight weeks of base salary.

"I know it was a really hard decision that they handled with maturity and didn't come easily to them," a former employee said. "Especially knowing some of our executive staff was impacted, you could tell it wasn't something done to protect any specific group of people but rather to improve the company as a whole." As for the actual communication of layoffs, a laid-off employee said that they heard about the reduction in workforce in the news before they were notified. Employees were eventually sent a calendar invite and received the news via Zoom.

Today's layoffs come a little over a year after the company, which has backing from Google Ventures, SoftBank Vision Fund 2, Lightspeed Venture Partners, and Kleiner Perkins, landed unicorn status.

These days, though, the coveted $1 billion valuation status — that many companies hit during the pandemic — seems to be coming with growing pains. Cameo's cuts come amid a broader pullback in the private tech sector, after public tech stocks have spent months seeing share prices slashed. This week, Amazon aggregator Thrasio began laying off portion of the company after being valued at nearly $5 billion in 2021. Robinhood, a consumer investing and savings company, announced that it is cutting 9% of staff, roughly 300 people. Other companies that have scaled down team size include workforce management startup Workrise and virtual events platform Hopin.

At one point, Cameo was making impressive money — largely due to the pandemic's impact on the creator economy and virtual life. Galanis told Variety that, in 2020, the company made a gross revenue of $100 million, up 4.5x from the year prior. Yet, as the creator economy scales and consumer tastebuds shift, Cameo's path is clearly complicating.

As I wrote previously, over the past two years, tech rightfully became more critical than ever for the services that it provided to the average human, whether it was empowering an entirely distributed workforce or helping us get access to health services via a screen. In this case, a light-hearted app that connected fans to celebrities brought the creator economy and joy to us during a Very Online Moment. Yet, tech at large also became vulnerable. Pandemic-era growth has always had a caveat: The tech companies that found product-market fit and demand beyond their wildest dreams are the same tech companies that knew their win was at least partially dependent on a rare event.

Cameo's layoffs mean that the startup needs to rethink how it will build, and this time, that answer is hopefully not at the cost of its own employees.

Current and former Cameo employees can contact Natasha Mascarenhas by email at natasha.m@techcrunch.com or on Signal, a secure encrypted messaging app, at 925 609 4188.

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