The COVID-19 pandemic is making for a convenient excuse for some businesses who were struggling before, but now have the perfect excuse to downsize. ConsenSys, the struggling Ethereum incubator, has just announced 90 people would be losing their jobs, reducing their total headcount by 14%.
If you were to believe the spin put out by the incubator, this massive layoff is entirely due to the economic uncertainty created by the virus. “The global COVID-19 pandemic has deeply impacted the world’s health and livelihood,” a spokesperson told CoinDesk. “ConsenSys has carefully analyzed its business in relation to what is occurring globally. Like most of its peers, the company is seeing extraordinary uncertainty in the market, with businesses rebalancing priorities and reevaluating timelines.”
Despite the layoffs, the company insists that none of its key operational functions will suffer. That will help the company on its current focus, “crisis-related opportunities such as Central Bank Digital Currencies (CBDCs), emergency loans disbursement solutions, supply chains for personal protective equipment (PPE), and related identity solutions.”
The employees layed off will receive two months’ severance pay, and ConsenSys will help them with career transition services, although that may be a tall order as millions are now out of work due to COVID-19, and competition will be fierce.
While this round of cuts is being blamed on the unique situation the world now finds itself in, Consensys was been cutting employees before there was a world crisis to blame. In February, the company cut another 14% of its total headcount. Where the company began the year with almost 850 employees, it now has just 550.
Although it’s undeniable that COVID-19 has devastated the world economy, Consensys’ troubles could be seen as much as a year ago. When it announced in April, 2019 that it was seeking as much as $200 million in outside investment, the company only had $21 million in revenue, with the only profitable piece of the firm being its consultancy service. Perhaps realizing that the company couldn’t achieve any of its ambitious goals with the struggling Ethereum blockchain, the company only publically received $10 million from the SK Group.
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