After laying off 140 employees in mid-July, a loss of 35% of its workforce, Callisto Media made another significant reduction on Monday and reportedly closed, at least temporarily, its physical offices in both New York and in Emeryville, Calif.
Although the scale of layoffs is unspecified at press time, former employees estimate that as many as 200 employees were jettisoned, dealing another severe blow to the employee ranks.
CEO Benjamin Wayne, who founded the independent nonfiction press with Matt Oesterle in 2011, delivered the news to staff in a virtual meeting at noon on Monday. In a recording provided to PW, he told the workforce, “when we planned in the early part of the summer for the difficulty of the market ahead, we were already looking at one of the most challenging markets that I had seen in 28 years as a CEO…. We've been trying to raise money since this summer, but like every venture company trying to raise money in this market, we found that there simply isn't any. No outside investors are writing new checks.”
Wayne insisted that “Callisto, due to the strength of its annuity and its economic model, has the ability to become profitable, and we have the support of our existing investors to provide a very small amount of cash to bridge to that profitability. But it requires that we take swift and decisive action to restructure our costs and our cash flow as an organization.” Back in July, Wayne’s promise of “swift and decisive action” translated into massive layoffs, and once again employees braced for bad news.
Callisto staffers already felt uneasy. Two weeks ago, “we had gotten news that the RTO [return-to-work order] was not going to be enforced,” an anonymous staffer told PW. “On Wednesday, [Oct. 19,] we got a G-chat from one of the executives saying the office is closed.”
Employees were informed that the company was “taking into account new CDC guidelines” for Covid, to account for the office closure, though it was unclear what new protocol they were referring to. That same Wednesday, keycards to California and New York office spaces were deactivated. “When we went into the NYC office, apparently all our security cards were disabled and there was talk of a Covid outbreak,” wrote a staffer. “Was this all BS as they were preparing to close the office?”
Wayne told staffers that those “on the go-forward team” would meet in the coming weeks to learn “the new strategy and understand your role in helping Callisto continue to succeed in the months and quarters ahead.” Those slated for dismissal received emails 10 to 15 minutes after the CEO’s statement, notifying them of their status.
“In the email, which has not specified our severance, we can retain our [work-issued laptop] computers if we sign our [severance] agreements,” an ousted employee said. July’s laid-off workers also sat with an HR team for an exit interview, but this time around, the explanatory email sufficed. “Maybe they’ll reach out and do exit interviews later,” said the now ex-staffer. “But they’re kind of aware [of how it went last time and] maybe they did not want to go through another [large set of] exit interviews.”
In a press release, Wayne acknowledged that the company was "immediately restructuring its operations," in a move that would impact both its New York and California staffs and yield "significant cost savings." He insisted Callisto will "continue our double-digit growth," but said "the timing uncertainty of a public offering, and instability of the broader market, dictate a near-term focus on balanced growth and profitability.”
Though Wayne did not point to the exact cause of the downturn in Callisto's financial results, the decline in juvenile nonfiction sales is certainly one reason. The company enjoyed big gains in 2020, riding the wave of parents looking for materials to educate and entertain their children when schools were locked down. The publisher's Rockridge Press imprint was a big winner in 2020 led by My First Learn-to-Write Workbook, which was one for the biggest hits of the early pandemic. The book has sold 1.4 million copies since its August 2019 release and although, according to NPD BookScan, it has sold about 285,000 copies so far thus year, that sales rate it below that of the last two years. Moreover, the entire juvenile nonfiction category has seen unit sales of print books fall 10% through mid-October according BookScan. For all of 2021, unit sales in the category dropped 6% from the high-water mark of 2020.
Callisto said it has sold more than 50 million units since it was launched in 2011.
This story has been updated with further information.
