It has been sixteen months since the cryptocurrency markets hit historic highs before losing around 80% of those gains. The rapid shift in value has prompted necessary changes in behavior for many of the businesses that blossomed in the wake of the crypto boom.
The crypto space is currently “streamlining”, cutting back, trimming the fat, laying off staff – call it what you want. The point is the once booming industry is now consolidating staff and resources as businesses either fold or find a new path forward in the ever-changing landscape that is cryptocurrency. The bear market has affected hundreds of blockchain and cryptocurrency-based projects.
The streamlining process started to make headlines in October 2018 when it was reported that Coinbase, the largest crypto exchange, was firing more than 15 employees. This raised eyebrows as Coinbase has been pushing towards becoming a publicly traded company. Meanwhile, Brazil’s largest exchange, Huobi, fired 60% of its team. Bithumb, the largest exchange in South Korea, recently announced plans to fire 50 percent of its staff.
Ethereum-focused startup ConsenSys recently announced they will let go of 13% of their staff. Joseph Lubin, ConsenSys CEO and co-founder of Ethereum, said the company would be moving into phase 2.0. “We’re going to get a lot more rigorous in terms of milestones and timetables,” Lubin stated in an interview after the announcement. This newfound rigor would involve “dissolving projects if we’ve come to the conclusion that our earlier assumptions were incorrect.”
The massive Chinese mining firm Bitmain also announced layoffs, as did crypto exchange Shapeshift, with CEO Erik Vorhees writing the cutbacks were “a deep and painful reduction, mirrored across many crypto companies in this latest bear market cycle.” Steemit, the once popular decentralized social network that runs on the Steem blockchain, also announced a layoff of more than 70 percent of its staff in direct response to the market conditions.
Earlier this month the cryptocurrency project Dash announced plans to reduce staff as part of their own budget-tightening. Dash Core Group (DCG) CEO Ryan Taylor said the decision was not taken lightly and came as the result of months of “actively finding ways to reduce the budget”.
Layoffs: The Latest Thing in Crypto
Each of these projects represent different sectors of the cryptocurrency industry. Despite their differences each has had to face the reality of the current bear market. The layoffs seem to be inevitable at this point.
Only three months ago The Wall Street Journal declared layoffs “the Latest Thing in Cryptocurrency”. “A number of smaller firms that raised money during the manic 2017 cryptocurrency rally have retrenched sharply or quietly closed,” the Journal reported.
What does the current shuffling of employees mean for the crypto space in the long term?
The Serious Will Remain
“The crypto space is in a consolidation phase. I think many bad actors will be removed, and the serious players will remain,” says Sterlin Lujan, a crypto consultant, author, and former Communications Ambassador for Bitcoin.com.
Lujan’s position at Bitcoin.com involved traveling to exotic locations and speaking at conferences to help further the brand, as well as promote his philosophy of relational-anarchism.
Lujan is an eloquent speaker and a convincing salesman, but when it’s time to watch the budget, positions like his are the first to be let go. Lujan remembers:
They started happening all across the industry, so I was not really surprised when Bitcoin.com started letting people go.
Despite losing his position in the company, Lujan does believe this consolidation phase will be a boon for the cryptocurrency and blockchain industry. “In this sense, the market will eventually recover and company’s will begin to grow again,” he says. “I am uncertain if we will see a bull market like the one of December 2017, but you never know.”
Whether a bull market similar to December 2017 will take place remains to be seen. However, the future of blockchain based businesses might be bright – even with the layoffs. According to a LinkedIn study, blockchain developers are one of the fastest-growing emerging jobs in the United States. “Only time will tell if blockchain will be a long-standing trend in the job market,” the report states.
Jobs Still Out There
Cryptoglobe recently reported on a new study from The Next Web which revealed that US-based companies posted 2,616 blockchain-related jobs on Glassdoor, a leading online recruitment site. Out of a total 5,711 crypto and blockchain jobs listed on the platform, there were reportedly 1,015 that were posted by employers from the UK.
According to the report, there are currently thousands of job listings on Glassdoor for blockchain professionals who may be skilled at marketing, sales, and software development.
Even with the layoffs, Joseph Lubin of ConsenSys is expecting growth in his region of the crypto space. At SXSW 2019 in Austin, Texas, Lubin said he believes “there’s way more activity in our ecosystem right now than there was a year ago or 18 months ago.” Lubin also stated that ConsenSys is planning to do around four or five utility token launches this year.
The ups and downs of the crypto and blockchain industry have real world effects on the individuals who have become accustomed to earning their livelihood in this still emerging ecosystem. For people like Sterlin Lujan, the consequences of the layoffs are hitting closer to home. Still, despite the turbulence, Lujan remains confident in the technology and markets.
“This is a wild space, and people still like to speculate on the future value of cryptocurrency. I just think what happened taught everyone a valuable lesson,” he says. “The crypto markets are just as susceptible to hype and getting heated up as any other market.”