This Monday, with tremendous sorrow, I announced layoffs at GumGum during an all hands call. What was said on the call was in many ways deeply personal for all of us––and I want to honor our values of thoughtfulness and respect at this difficult moment by generally keeping the specific details of that call private for us at GumGum. That said, I do feel called to share a few things publically – with our clients, partners, peers, and members of our industry especially -- about broadly why this came about and how we handled it.
Heading into the last weeks of Q1, GumGum was poised to exceed its revenue goals. When the COVID pandemic began, our momentum came to a halt. Advertisers began pausing spend, not just with GumGum, but everywhere. Complete industries shut down like travel & tourism overnight. Live Sports events paused with no clear timeline on their return. Projections from trade groups and economic authorities painted a sobering picture of uncertainty and volatility.
As soon as the reality of COVID-19 became clear, I began seeking to understand how it might impact GumGum in both the near and longer term––and what we could do to mitigate those impacts. In weekly company-wide video briefs, I shared what I was learning. I also shared the fact that to continue delivering on our mission as a company, we needed to conceive a new 2020 business model and operating plan suited to the new reality we’re all facing.
New organizational and cost structures would likely mean reduction in headcount, but I didn’t want to do that unless there was absolutely no other choice. I began forgoing my own salary and we put into place senior leader compensation adjustments. We paused hiring and reduced and eliminated every non-essential, non-people cost possible. Ultimately, it wasn’t enough.
I made this decision after careful consideration of the interests of all those who are invested in the success of our enterprise – clients, partners, investors, and, most importantly, employees. To be sure: I did not make this decision lightly. There is not a single person affected by our layoff who I would not prefer to retain. We are losing teammates who have all made valuable contributions in their time at GumGum. These are people whose personalities have shaped our culture, who are not only co-workers but also friends. This is a sad, uncertain time, in general and I made this decision full of that sadness.
As I looked at our options, I did consider alternatives to layoffs, like furloughs and additional compensation reductions across the organization. The reason we did not elect those options was that, as CEO, I have a fundamental duty to ensure that GumGum continues to deliver exceptional products, services, and support to our customers well into the future. As such, the decision was not about money in the bank, but rather about reconciling revenue impact with the cost of operating the organization. As painful as it is, I am certain that our team was just too large for the revenue we will generate this year. It would be irresponsible of me to take a short-term solution for what I know is a permanent revenue impact. It would be unfair to the business and, more importantly, to our people.
With the actions I have taken this week I tried to do as much justice as possible to both my loyalty to GumGum’s incredible employees and my duty as a CEO.
Even as we let go of so many amazing contributors, our team remains incredibly strong and poised for long-haul success. Yet I remain acutely troubled by the pain that these layoffs have brought. We are making every effort to ease the pain and smooth the transition for all, but I know that GumGum can only do so much. For that and so much else, I am sorry.
I am also so grateful for our whole team. This has been and remains a tremendously challenging time, but over the past 6 weeks I have been constantly overawed by the agility, grit, and, most of all, thoughtfulness of GumGum’s people. Everyone has stepped up in unique and powerful ways not only to support our clients and our business, but to support each other.
That is so good to see––because we all need each other’s support now more than ever. Together, we’ll turn the pain and, yes, anger that we’re all feeling into something powerful and productive.
For those clients and partners who have loved working with us, who are wondering whether this will change GumGum, let me be clear: We have already changed. We are now fueled by the burning feelings that this pandemic has provoked in us and in so many others––a fuel that is driving us to do better than we’ve ever done before.
Phil Schraeder, CEO