It’s been a long and lonely winter for the industry as the prices of cryptocurrencies have been sinking, reaching the lowest rates ever after the all-time high that happened in December 2017. In other words, 2018 started with a lot of hope among crypto enthusiasts but ended with many wishes not coming true.
People who suffered the most were employees in big companies related to this industry. Many crypto businesses had to accommodate to the new situation, laying off staff in order to survive. The layoffs started in December last year and have been going on for quite a while. The actual reasons for the crypto layoffs are not always related to the crypto winter, but it has affected all of them up to a certain extent.
The company had more than 1,100 employees around the globe, and its CEO Joseph Lubin announced on Dec. 3 that he planned to take a more revenue-driven approach, including possible layoffs. He called the new and reborn company approach ConsenSys 2.0 and stated that the project would get more rigorous when it comes to timetables, milestones, and deadlines.
The company was about to see 60% of its workforce being downsized. However, Vanessa Grellet, Executive Director of Enterprise and Social Impact said that crypto layoffs did not exceed 13% of staff in this company.
The NEM Foundation is not as big as ConsenSys in terms of the workforce with approximately 200 people working for this company. Alex Tinsman has recently announced that the company would undergo restructuring and that big budget cuts are planned. In fact, Tinsman blamed the previous governance council of the organization and stated that his team had to work in a very narrow timeframe in order to restructure the company.
Both NEM and ConsenSys did not live up to see a lot of people being laid off. They are either planning it or being in the middle of the process, but Denver-based company ShapeShift AG has already proceeded with that and has lost one-third of their workforce.
Not being a huge company, laying off 37 people posed a significant blow for them, and CEO Erik Voorhees did not hesitate to admit that the crypto winter was the main reason behind this unpleasant crypto layoffs.
The bear market has taken its toll on crypto exchanges as well, and one of the Chinese giants Huobi faced issues related to the downward trajectory of crypto prices. The Chief Executive Officer of Huobi said in an interview that they would even struggle to survive if prices keep on dropping.
Huobi would probably see more of its workforce being cut down due to the crypto winter, and the number which is often mentioned is a hundred. However, the crypto exchange currently has 1,300 workers, and bringing the number down to 1,200 would not be such a massive blow for the company as it would be for the people losing their jobs.
It seems that the companies in Canada have a hard time accommodating their temperature to the crypto ice age that lurks outside their windows. Recently, Coinsquare has had to make 40 people redundant and narrowed the overall number of employees down to about 150. In other words, they have dismissed 27% of their staff.
What’s interesting about this company is that even some of the executive members were laid off as Cole Diamond, CEO of Coinsquare, planned to make radical changes.
The CEO of this London-based company also confirmed that there are “staff reductions” underway. BlockEx was a successful ICO that managed to attract $24 million during their fundraising campaign, They gained much trust from thousands of investors who wanted to see the next-gen digital asset platform come to life. BlockEx did look serious at a time and set a number of initiatives for 2018, with most of them not being fully realized.
We left QuadrigaCX’s story as the last one on purpose because it is very likely to leave you flabbergasted. It all starts with the death of Gerald Cotten, who was the founder and CEO of the company, and brings us to a high-profile scandal that affected a lot of regular exchange users.
The private keys for the fortune stored on the platform died with Cotten’s sudden passing away. In other words, $250 million CAD saved in cold wallets cannot be retrieved in any way as Cotton was the only one who knew how to access them. According to his widow Jennifer Robertson, he was a “lone wolf” type who did not like sharing private business data even with the closest friends and colleagues.
The problem here is that Cotten’s death is still not confirmed, as his death allegedly happened in India. Skeptics may claim that he had just run away with the money stored in cold wallets.
The story doesn’t end there as the company has recently managed to transfer an additional $486,675 into the cold wallets, which means that these became inaccessible as well.
All of the upheaval happening at QuadrigaCX has resulted in many crypto layoffs, starting with the unfortunate series of events that began with the death of their CEO.
Crypto Winter Has Highlighted the Industry’s Sensitivity to the Market
Unfortunately, these crypto layoffs are yet more proof that the crypto industry still has a long way to go before it becomes mature enough to resist market tension.
Will the end of winter also see the end of the cold days in the cryptocurrency industry? While some call this a permanent decline into the crypto abyss, others consider it a bearish period that is bound to turn bullish shortly. While nobody can claim with certainty what is going to happen in the future, some companies are already considering the worst possible scenarios and are downsizing people to accommodate to the current state of affairs.
by Mary Ann Callahan
The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Grizzle hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.