Second Round of ConsenSys Cuts Far Less Painful, Says Insider
The Ethereum community comes to the rescue.
ConsenSys announced on Jan. 4 that it would be cutting the company’s headcount by 14%. This comes after a similar round of painful layoffs in December 2018. Although the crypto community has been quick to help those affected, Ether’s current market behavior may have smoothed over the latest contraction at the firm.
More Cuts, Fewer Tears
In December 2018, ConsenSys let go of a swath of employees and sparked rumors that the blockchain upstart was headed for dire straits.
Meanwhile, the crypto market, including assets like Ether, was still riding out a brutal crypto winter.
After peaking in January 2018 at just over $1,300, ETH tumbled below $90 around the time of the first cuts. ConsenSys eventually posted a memo on Medium that read “the sky is not falling,” which outlined the reasoning behind the shift.
“2018 was brutal,” said Paula. “From one day to the next, you just wouldn’t have [work-related] emails.”
To help stymy the chaos at that time, Paula created a thread where ex-ConsenSys employees could quickly find new jobs within the ecosystem. Engagement around the collection of tweets went through the roof as companies and the newly-unemployed sourced open positions with candidates.
“It was crazy. At work, I probably spent it answering messages and sourcing jobs. I couldn’t manage it, so [Phillip Stehlik] from Centrifuge helped me manage the requests via GitHub,” said Paula.
Eventually, the two streamlined the process after placing all open positions on a repo. The move was designed specifically to connect ConsenSys alumni with relevant positions. Listings found there today are slightly outdated, but this may change as a new wave of unemployed crypto enthusiasts comes to market.
The latest slash, which also saw ConsenSys shift its business strategy, has been far less disorderly.
Part of this has to do with the relative health of Ether, but also because the community is better connected.
Although she expects these layoffs to blow over and that “this time it was executed better,” Paula created a new employment thread for interested parties nonetheless.
Yo, Consensys layoffs – I’m looking for a community manager. As my new parody VC persona would say: let me know how can I be helpful.
Also feel free to reach out with list of available talents and our team at @ETHBerlin can spread the word.
— María Paula, not Maria (@MPtherealMVP) February 4, 2020
Trimming Down in Investment Anticipation
Beyond streamlining a large company, the latest announcement sees ConsenSys shifting focus too.
The firm will be dividing its resources between its suite of software businesses and spinning out startups in its incubator.
A spokesperson from the company told CoinDesk that it would “operate a software business composed of several of its products” which would include home-grown Codefi, MetaMask, Infura, and PegaSys. Codefi has already been tapped to help digitize the $3.8 trillion debt market via “mini” bonds.
Sources told The Block that the reason behind this was to better position the company for an upcoming raise. Indeed a stronger focus on a reliable business model is far more attractive than whimsical experimentation.
The founder of ConsenSys, Joseph Lubin, shared an exclusive brief with Breaker during the first restructuring in 2018. He said:
“We essentially started as an experiment—as did Ethereum, as did bitcoin. It has been enough to show up, it has been enough to do something cool, it has been enough to make a splash.”
In light of these comments, as well as the ongoing investment hype, the most recent trimming down makes much more sense. ConsenSys has been seeking $200 million from outside investors since April 2019, according to The Information.
Without a lead investor in view, however, reaching this goal will be difficult.