R3, the enterprise blockchain company once a darling of the top global banks, has laid off a fifth of its employees as part of cost-cutting drive. R3 announced the decision in a blog post, blaming tough economic conditions that it says have led the company to shift its focus and business model.
“With this renewed focus, we are also streamlining operations internally, which unfortunately will result in a reduction of headcount across various functions,” R3 stated in its post without revealing the extent of the layoffs.
Bloomberg revealed that the company had laid off just over a fifth of its headcount, citing unnamed sources with knowledge of the matter. The sources added that the layoffs affected the company’s operations globally and across different functions. R3 is based in New York but operates an office in the U.K. where most of the company’s software development takes place.
While enterprise blockchain technology has gained traction over the years, it remains a slow-moving industry where projects take years. R3 has announced dozens of such projects, partnering with global giants, including clearing and settlement giants DTCC and Euroclear, the Swiss stock exchange SIX, and the Central Bank of the UAE.
However, these projects have moved slowly while others have been abandoned, leading to lost revenue for R3, sources revealed.
The company, founded in 2015, maintains that despite the layoffs, it remains in a robust position. This is despite the company raising $107 million six years ago in a funding round led by banking giants including Barclays, Bank of America, and Wells Fargo.
“This restructuring will not only ensure agility and efficiency throughout the organization but also safeguard R3’s ability to innovate, grow, and deliver for its customers, even in the face of market uncertainties,” it said.
R3 started as a consortium of the largest banks, giving them a common platform to innovate on blockchain products. It evolved into a private company in 2017, and since then, it has been building blockchain products for financial service companies.
This year, it has announced partnerships with the Central Bank of the UAE and the Central Bank of Nigeria for their CBDC projects. With the latter, R3 is set to deploy a blockchain-based system that will give Nigeria’s central bank complete control over its fledgling eNaira.
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