- Shapeshift leaders have announced that the exchange has laid off a third of its staff
- In their official announcement, they cited the bearish crypto market as well as a too hasty expansion of the business as the cause
- They are latest in a growing line of firms to lay off staff following the 2018 bear market
The bitcoin market took a significant hit at the tail end of 2018 and this has led to a number of layoffs at firms in the industry. Places like ConsenSys have been forced to lay off a part of their staff and it looks like crypto exchange Shapeshift has joined that number.
Unlike in the case of some firms, the news has been directly confirmed by Shapeshift themselves via their CEO Eric Vorhees’ Twitter handle as well as a post on their blog.
“With a heavy heart, today we laid off 37 people. We’ve published a blog on this, also discussing some of our missteps and lessons as a company. “Overcoming ShapeShift’s Crypto Winter and the Path Ahead” by
link: https://link.medium.com/BQpDUjGSjT) link.medium.com/BQpDUjGSjT #bitcoin”
Held too much of reserves in crypto
According to the announcement, 37 members of staff were let go of, accounting for a third of the firm’s workforce.
The reasons for the layoffs were accredited to the current bear market as well as their company’s exposure to Cryptocurrency assets.
“As a company, our greatest and worst financial decision is the same: to embrace substantial exposure to crypto assets. Much of our balance sheet is comprised of them. We accept the volatility, we accept the risk,” the statement said.
The post also apologizes to the workers that were laid off, though stating that “we are improved by our time with you, and I hope you find yourselves improved by your time with us.”
The blog post went into detail about the problems that have led to the current state of Shapeshift, the primary one being that the company took on too many projects too soon and that led to their attention being significantly divided.
The company has structural and staff issues in that their staff size grew faster than their ability to manage such a workforce.
The company’s growth rate also led to a good amount of its funds being spent on legal bills and risk assessment.
Shapeshift also lost API customers due to their decision to impose KYC on accounts when venturing into new business.
The final blow was the decline in bitcoin value in December 2019. This led to a reduction in their income which has, ultimately, led to their decision to lay off staff.