In summary
- Software giant Consensys announced Tuesday that it has laid off 20% of its global workforce, affecting 163 of its 828 employees, amid a slowly recovering crypto economy.
- The decision marks a change in strategy for the company, which plans to focus on supporting the proven “winners” in its portfolio, especially the MetaMask Cryptocurrency wallet and the Ethereum layer-2 network Linea.
- Joe Lubin, CEO of Consensys and co-founder of Ethereum, attributed the cuts to regulatory uncertainty in the United States and “broader macroeconomic conditions.”
Ethereum software giant Consensys announced Tuesday that it has laid off 20% of its global workforce, amid a slowly recovering crypto economy that has failed, for months, to boost ETH’s stagnant price.
The decision affected 163 of Consensys’ 828 employees, and touched all departments of the company, a Consensys spokesperson told Decrypt. Affected employees will receive severance packages and will have the time to exercise their stock options extended, and will continue to receive healthcare benefits in applicable jurisdictions.
More broadly, the contraction also marks a shift in strategy for the company, which for years has invested heavily to incubate a wide range of projects that operate in, or are related to, the Ethereum ecosystem. (Decrypt was one of those companies, and Consensys remains one of 22 investors in the editorially independent publication.)
Going forward, Consensys plans to step back and focus on supporting the proven “winners” in its portfolio, especially the MetaMask cryptocurrency wallet and the Ethereum layer-2 network Linea, the company spokesperson noted.
“Looking ahead, I see a next-generation economy not dominated by large monolithic companies; Instead, smaller, agile, AI-powered companies with Web3-based orchestration tools will operate more efficiently,” said Joe Lubin, CEO of Consensys and co-founder of Ethereum, in a blog post. “To stay competitive in this rapidly growing space, we need to reshape ourselves and become more agile, more effective and even more efficient.”
Lubin also attributed the cuts to regulatory uncertainty in the United States and “broader macroeconomic conditions.”
Consensys had run-ins with the US Securities and Exchange Commission (SEC) this year, but appeared to emerge triumphant when the SEC reportedly dropped its investigation into Ethereum’s security status earlier this summer. However, shortly after, the SEC sued Consensys over MetaMask, calling the wallet’s staking features illegal securities offerings.
Salvation for Consensys in the cryptocurrency market, meanwhile, has remained elusive. While fundamental cryptocurrencies like Bitcoin continue to search for new all-time highs, ETH has fallen around 35% since March, to an unexciting $2,618 at the time of writing.
Some analysts recently expressed concern that Ethereum’s recent spate of technical achievements, most notably the distribution of on-chain traffic to a variety of cheaper and faster Layer 2 networks, could end up significantly depressing the price of ETH to long term by putting the token on an inflationary path.
Ethereum co-founder Vitalik Buterin has in recent weeks advocated for new fee-sharing models that could help remedy those issues and return value to Ethereum while reaping the benefits of Layer 2 chains.
Meanwhile, the 163 Consensys employees who received the layoff letter today find themselves in a crypto job market at a crossroads, marked by uncertainty and contraction in one sense, and cautious optimism in another. The upcoming US presidential election looms as perhaps the most important of all, with its potential to completely reshape American crypto policy.
Edited by Andrew Hayward
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