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ConsenSys may be cutting more than half of its employees

Posted: 21 December 2018 12:54 pm
News

Depending on how you look at it, it's either healthy weight loss or starvation.

ConsenSys is one of the hearts of the Ethereum ecosystem, acting as the hub of a wheel with many spokes. These spokes are startups building on Ethereum. But now ConsenSys is snipping away many of its spokes.

And they seem to be getting cut quickly. The ConsenSys website still describes there being "50+ spoke companies", while an email from ConsenSys Labs partner Shawn Cheng to The Verge said there are now only about 36.

It's part of an ongoing downsizing effort dubbed "ConsenSys 2.0", aimed at creating a slimmer and more efficient company, and might end up removing about 50 - 60% of ConsenSys's previously 1,200 strong workforce, according to The Verge.



Wire cutters

The surviving spokes are reportedly going to be the ones focused on building core Ethereum tools to facilitate other developments. These reportedly include MetaMask (browser-based Ethereum access), Infura (ground-level developer tools), PegaSys (enterprise grade Ethereum) and Kaleido (blockchain as a service).

The cut ones are suggested to mostly be those building the end user applications, and many of them aren't yet profitable in themselves being still dependent on ConsenSys funding. The funding for ConsenSys has mostly come from ConsenSys founder Joseph Lubin, who became a crypto billionaire through his Ethereum investments but might now be facing unpredictable Ethereum prices and slower ecosystem growth than originally envisioned.

According to insiders, the cut spokes are being offered a choice of either two months severance, or an equity stake of about 10% and a convertible note that represents about a month of their spoke's burn rate, as their spin out deals.

In most or all cases, this is likely to be too little to keep the spokes spinning, and it's suggested that they will likely need to start looking for outside investors or shut down.

Yet, ConsenSys itself is also reportedly seeking outside investment. Publicly, Lubin has reportedly said that ConsenSys is open to outside investors, but insiders say the company is actively hunting for outside funding.

A slim new look

The same story is going on all around the cryptocurrency markets. It's certainly not pleasant for those caught in the hurricane, but there's some truth to big storms clearing the air.

As one source said to The Verge, the days of expensing $14,000 in two weeks, or buying Emirates business class tickets for a same-day flight are over at ConsenSys, and the company is now "looking to reduce spending that isn't absolutely necessary for business success" said Frithjof Weinert who works in finance at ConsenSys.

ConsenSys 2.0 is going for a slimmer, more toned new look. After all, amputation is an undeniably effective way of losing weight fast.

Elsewhere, Vitalik "Non-giver of Ether" Buterin has failed to live up to his name by making donations to projects struggling through the soft markets. #YOLO.

Not to be outdone, Substratum has announced that it will be day trading its remaining Ether holdings to hopefully roll the dice in an upwards direction and keep the project funded. #YOLO.


Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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