New York City, New York-based ConsenSys, a blockchain-associated technology incubator and technology company, has announced a major restructuring that will result in a significant reduction in headcount and the spin-off of companies that received ConsenSys financial support.
The number of employees impacted is estimated to be in the hundreds with the possibility of up to a sixty percent of its 1,200 employees being affected.The company has suggested that the restructuring is the result of major competition in the blockchain space and the company’s desire to exit the incubator business, known as ConsenSys Labs, in favor of being a more traditional venture capital investor. The leadership and employees of the approximately fifty projects being funded by ConsenSys would need additional financial support, and lacking this support would mean having to radically downsize or close down their projects.
The company was intimately involved with the Ethereum crypto-currency and looked to gains in the Ethereum units to continue funding the enterprise. ConsenSys was primarily funded by its founder who was said to have a crypto-based fortune in the low billions. When the price of ETH tokens falling from $1,417.38 to $102.44, ConsenSys could not longer afford to fund its projects with an estimated burn rate of $100 million per year. Hence the spin off of the projects.
While most people think of blockchain as the technology behind crypto-currencies, which appear to be collapsing or fluctuating in wild swings, the technology can be applied to most systems that require a record of secure transactions that are available to all without a central server and control mechanism. However, most companies prefer to serve as the keepers of a a well-controlled proprietary platform rather than a free-form enterprise piggybacking on a public system.
Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere ... are you now wondering, Am I Next?