Layoffs in the Crypto & Blockchain Industry Stirring things up

Layoffs in the Crypto & Blockchain Industry Stirring things up

The recent sellout of various cryptocurrencies and the ever dipping price of Bitcoin and altcoins have to lead to the first-ever layoff in the crypto industry.  This is a move taken by different firms working to survive the sellout that is going on currently.

ConsenSys, a known venture which is working with the blockchain technology, announced that they would be overhauling their entire business model and cut off about 13% of the total staff. Some other companies which were able to raise money last year have either quietly closed or retrenched sharply.

Steemit, another firm which runs a social network on a blockchain-based network, laid off almost 70% of its staff because of the selloff.

If you take a closer look at 2017, the markets were booming which in turn fueled a hiring spree with hundreds of startups developing new uses of the blockchain. Billions of dollars were raised using ICOs.

The split of Bitcoin has brought down the crypto market to its knees. Bitcoin is more than 80% down from its December 2017 value, with the total value of all cryptocurrencies only about $111 billion, which was floating around $827 just at this beginning of this year.

This is not the end. According to Ernst and Young, more than 86% of ICOs are trading below their listing price and have lost nearly 30% of their value. “As things get real we have to be a lean, business-minded organization,” said ConsenSys founder Joseph Lubin.

The company uses the Ethereum platform and operates as a development house for startups who are looking to build products using the same. They provide services and support in exchange for equity stakes.

Even people who were looking forward to working in the sector are now seemingly losing interest in the industry., a portal for job searches worldwide, saw a 3% fall in the number of searches through October. Rewind 12 months and you would see a 483% increase in the phenomena. It's not that the number of blockchain related are stagnated, they are still increasing, albeit at a much slower pace than before.

Another blockchain based identity verification firm known as Civic was able to raise $33 million last year from its ICO, but according to the founder and Chief Executive of the firm Vinny Lingham, they have converted 90% of those assets into US dollars.

Token Agency, an advisory firm which consults firms considering ICOs, was forced to cut down its 20 employee team down just four and most of them were paid in cryptocurrencies. Mr. Behnke, the founder of the company, said he didn’t hedge properly against potential declines in Ethereum, which has fallen more than 90% this year. “My biggest issue throughout was not having proper risk management,” he said. “We didn’t anticipate it would be this quick and abrupt.”

“I think what’s going to turn this around is real products actually touching people,” Mr. Behnke said.

According to analysts, this sellout has forced the industry to focus on products which will have real-world implications and are giving organizations a chance to reconsider their strategy regarding the services they are offering.

PC: Pablo, Unsplash

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Anurag Chawake Opinions expressed by techsutram contributors are their own. More details

I am an Engineering Student with a keen interest in Blockchain, Cloud Computing, AI, ML and related startups. I am currently working with Techsutram as a Writer/Intern.

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