Airtime Layoffs: Phil Libin's Company Cuts Staff

Airtime Experiences Workforce Reduction

Airtime, the video-focused startup established by Evernote founder Phil Libin, has recently undergone a reduction in its workforce. This information was confirmed by Airtime itself, and initially reported by TechCrunch.

Details of the Layoffs

The company announced that 25 employees were affected by the layoffs, representing a significant change within the 58-person team. Airtime characterized these departures as being larger in scale than typical workforce adjustments.

Despite the company framing the changes as part of a regular seasonal employment cycle, internal sources suggest that staff members were taken by surprise. Prior to this announcement, many believed the startup was preparing to secure additional funding and had been assured that no staff reductions were planned.

Company Background

Previously operating under the name mmhmm, Airtime was initiated in 2020 by Libin. His prior venture, Evernote – a note-taking application – achieved a valuation approaching $1 billion before facing increased competition from platforms like Notion. Evernote was later sold to Bending Spoons in 2022, albeit for a considerably lower sum.

Launched during the surge in remote work prompted by the COVID-19 pandemic, Airtime currently provides two primary tools for virtual meetings. Airtime Creator enables users to simultaneously present materials and appear on screen, while Airtime Camera facilitates the creation of customized visual appearances for online interactions.

The "Seasons" Employment Model

In late 2022, Airtime introduced a unique employment structure based on “seasons,” following an initial layoff impacting 10-15% of the staff. This aimed to cap the company’s headcount at 100 while it pursued product-market fit.

The intention behind this model was to eliminate unexpected terminations. Instead, the company would assess staffing needs approximately every six months, determining which employees would be invited to continue for the next “season.” This approach provided staff with advance notice if their roles were not renewed, allowing them time to explore alternative opportunities.

This unconventional structure proved controversial, but was consistently applied since its implementation.

Recent Developments and Employee Concerns

The recent layoffs have caused frustration among staff, as their expected “season” end date was previously communicated as June 30th. However, impacted employees were informed of a termination date of June 6th. This means their severance packages will cover at least a portion of the period they were initially promised under the “seasons” arrangement.

Libin clarified that departure dates vary, with some employees remaining for an additional two weeks to finalize tasks, while others are leaving sooner. All affected employees are receiving six weeks of severance pay, potentially addressing concerns about miscommunication or confusion.

Decision-Making Process and Contributing Factors

Sources indicate that leadership reached the decision regarding the layoffs over two eight-hour meetings held at Nobu in Palo Alto. Staff were notified on Tuesday, June 3rd, with managers informed the preceding night.

An unspecified number of independent contractors were also affected by these changes.

Internal sources suggest that Airtime’s product struggled to gain significant traction and experienced considerable user churn. High monthly expenditures on user acquisition advertising, reaching tens of thousands of dollars, coupled with Libin’s frequent absence from daily operations due to his focus on a restaurant in Arkansas, contributed to the situation.

Airtime attributes the larger cuts to a shift in the company’s strategic direction.

Funding and Acquisitions

To date, Airtime has secured approximately $135 million in venture funding through multiple early-stage investment rounds.

These funds were partially allocated to acquisitions, including Memix, a filter-maker, in 2020, and Macro, a developer of filters and reactions for online meetings, in 2021. The Macro acquisition aimed to bring on board founders with strong product development expertise, Ankith Harathi and John Keck. (Both have since departed Airtime, according to their LinkedIn profiles.) Airtime’s parent company, All Turtles, also recruited Alexander Pashintsev, who previously worked on AI at Evernote, though Airtime has not yet launched a major AI-driven initiative.

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Correction: The total funding raised by Airtime was approximately $135 million, not $235 million. This error has been corrected, and additional details regarding severance packages have been included.