The slowdown in the crypto market continues to remain unabated. As a result, many blockchain and cryptocurrency companies are either shutting down their operation or winding up the scale and scope of the activities. We have witnessed a number of organizations including the Bitmain which has downsized the workforce and the latest to join the string is Blockfolio. The company has announced the restructuring of the organization by shedding its staff besides putting one of its most important incubator projects on the hold. The primary reason behind this development is the ongoing bear market which has forced even some of the biggest names in the industry to restructure their approach. Companies like Shapeshift, ConsenSys, and earlier mentioned Bitmain had been forced to recalibrate their expansion strategy and adopt downsizing the workforce.
How many employees lose the job?
A report on The Block revealed that the number of employees in this California-based organization is 37 now which translates into a reduction of 10% to its previous strength. The CEO of the company, Edward Moncada stated that taking the decision to downsize the employee strength is extremely difficult for the company, but they have to take the decision in the long-term interest of business sustainability, especially in the wake of ongoing crypto winter. Along with the reduction in employees, the company has also put a hold on its ambitious incubator project and severed the contract with five other parties involved in the project.
The move has surprised many in the backdrop of funding that the company received just three months ago. The organization raised Series-A cash from the various venture capitalists led primarily by Pantera Capital in October when the company decided to expand its operation beyond the crypto tracking application. Now after this restructuring decision, many questions have been raised about the funding of over $11 million received by the company with many experts suggesting that the money will now be utilized in keeping the company’s current operations afloat. Some also argue that the extravagant and lavish spending by the company to launch a new 2.0 version of the application put huge financial distress on the resources. During the launch event, the company hosted lavish parties, lunches, and even sponsored a seven-member trip to Prague to launch the app.
However, the CEO of the company defended the expenses on the app launch in Prague and said that the company has been extremely frugal and cost-conscious in all its operations including the launches. He also mentioned that they had taken all the necessary steps proactively to make sure they will able to make it through any market in the world. In reality, all these comments seem to be away from what actually is happening on the ground. Some of the company insiders claim that the strength of 40 people in the organization is really not needed and they can make do with a dozen people.
In addition to the crypto tracking application, last year the company launched a communication platform for the tokens called Signal. Moncada said that the company had received a tremendous response for Signal and the platform has been embraced by various token teams very enthusiastically. The platform is the first one of its kind, and due to its rising popularity, now the market is witnessing other players coming with similar platforms. That said, the blog of the company hasn’t been updated since November last year which makes it difficult for people to know about the new developments in the organization and its products. In sum, if we compare the downsizing decisions taken by Blockfolio and other companies, it becomes clear that Blockfolio is not very badly affected by crypto market slow down. Other companies like Shapeshift and Bitmain are in for far deeper trouble as the effects of crypto winter continue to rage on.