ShapeShift, a major crypto exchange was compelled to dismiss 37 of its employees from their duties this week which is equal to 30% of its strength.
Erik Voorhees, the ShapeShift founder, and CEO confirmed this in a letter that the tumbling markets had led the company to restructure its costs and prepare itself to the upcoming negative impact. He had quoted that the reduction of the workforce by a third was inevitable. He stated “Today, we let 37 employees go, reducing the size of our team by a third”
2017 had seen the crypto market rise extensively. The potential in this sector led the giant companies namely ConsenSys, Bitmain and ShapeShift to shift base from their head offices and spread all over thus expanding their staff numbers to look after its affairs.
At the time of the bull rally way back in 2017, an enormous growth rate of about 3000 percent was witnessed by ShapeShift as the digital assets were worth more than $800 billion. Voorhees reasoned out that when the jumps and leaps in the business knew no boundaries, we progress at immense speed. Similarly, the downfall is equally drastic and damaging. He said “We ride high and fast during the ascents, growing at rates unseen almost anywhere else in the business world (ShapeShift grew 3,000% in 2017). And when the markets turn, the crypto recession is similarly dramatic and severe.”
After the run, when the market started its correction, the assets fell from their highs to around 70 to 80 percent and from there on commenced its journey of sustaining itself. This period is now witnessing receding profits, lower investments and the trading comes to a standstill.
With the increased number of employees at sectors in the digital market and at times outside the finance sector, profitability could not be achieved as the costs were too high to sustain them.
Voorhees went on to say that there were many mistakes that they committed as a company. They lacked vision and spread out their resources in too many areas, and later on, it became difficult to handle. He quoted “As a company, we’ve made a thousand mistakes. The most thematic has been a lack of focus. Here’s the lesson we learned: regardless of any particular project’s marketability, they were pulling our attention in too many directions. They cost financial resources. They required legal review. And then further review, and then additional review after that.” These factors cost them a lot and eventually biggies like ConsenSys, Bitmain and ShapeShift were forced to follow a 30 to 50 percent cut in their staff. They would now have to restructure and concentrate on their primary product.
Bitmain wiped out an entire department that was dealing in artificial intelligence, ConsenSys ordered its employees to focus on products that were used by the general users and ShapeShift has also started focussing on its primary business.
This shifting back to the basics cannot be termed as negative. The purpose to deal with the mainstream is back before they can venture out in different fields before another expansion.
It is vital for an upcoming market like these digital assets to face the downs and rise, and then reverse this format to sit back and ponder over the progress made and then take steps to reach the desired target eventually.