The Bad Times Are Coming for Startups
Last week, the employees of Cameo, a startup that sells personalized videos from celebrities, gathered for an all-hands meeting. The news was not good: Nearly a quarter of the staff was being laid off.
“Today has been a brutal day at the office,” Steve Galanis, the company’s CEO, wrote on Twitter just after the announcement. “I made the painful decision to let go of 87 beloved members of the Cameo Fameo.” In the replies, people were pissed. Cameo had gone on a massive hiring spree in 2021, and many of the layoffs affected people who had worked there less than a year. It didn’t help that Galanis’ Twitter avatar was a Bored Ape NFT.
Just a few hours later, Doug Ludlow, the CEO of the fintech startup Mainstreet, announced that he had cut 30 percent of the company’s employees. “We took this action because we believe that there is a very strong chance that today’s incredibly rough market is only going to get worse,” Ludlow tweeted, “and potentially remain so for months, if not years.” The layoffs, and the language around them, are a sharp departure from the optimism of the past two years, when venture capitalists passed around multimillion-dollar deals like canapés at a cocktail party. Soaring valuations and booming IPOs made startups seem like a safe bet, inspiring hundreds of new venture funds. Now, the party seems to be suddenly ending—and downsizing may signal even worse times ahead.
