However, this market recovery hasn’t done much to stem the flow of blood from industry startups. In fact, two prominent companies in this sector recently announced layoffs of a handful of employees, accentuating that this so-called “crypto winter” hasn’t concluded just yet.
Ledger Prepares For (Extended) Crypto Winter
While Ledger, the French cryptocurrency security infrastructure provider, has continued to expand its product roster, recently launching an institutional arm and a new device — the Ledger Nano X — the firm purportedly isn’t in the best financial standing. According to a report from French publication Presse Citron published last week, the startup, which secured $75 million in funding during fiscal 2018, is looking to cut over a dozen staffers.
Citing information gathered by Les Echos, Citron explains that in a recent convention of Ledger’s executives, it was determined that a budget cut was needed. The cryptocurrency insiders concluded that 20 employees out of Ledger’s total of 200 should be put on the chopping block, as a 10% cut in payroll would be beneficial. Although, Eric Larchevêque, the chief executive of Ledger, subsequently denied this, explaining that none of the firm’s operations have been put on the backburner yet.
Interestingly, Ledger’s consideration of employing a 10% layoff might not be a result of immediate financial concerns, but of what’s to come for the cryptocurrency market. In an interview with CCN earlier this year, Larchevêque remarked that while he is convinced this sector will succeed for the long haul, he foresees months more of crypto winter. Surprisingly candid, he opined to the outlet:
“We think we could have 12-24 more months of a bear market. Or some kind of nuclear winter in crypto. So we are just adapting the growth of the company to make sure we can withstand two years of bear market… We are convinced that we are in a cycle, which means that sometime it will be a bullish market again. But at the same time, we feel that it may take some time.”
The keywords in the above quote are, of course, “adapting” to “withstand” the potential that Bitcoin could get slammed even harder before its eventual recovery.
Dozens Cut As Sirin Labs Reels In Pain
While Ledger has yet to cut staff, blockchain hardware builder Sirin Labs has. Speaking to Globes, the company, who famously signed Lionel Messi as an ambassador, explained that it recently laid off 15 of its 60 employees — amounting to 25%.
In an interview, company representatives explained that their Finney smartphone, which sells for $999, has seen dismal sales that were “not what [they] expected.” This layoff shocked many in that Sirin Labs has, through a token sale and independent funding round, raised more than $255 million, but considering the Messi partnership, other business expenses, and the collapse of Ethereum and their in-house token, SRN, it may not be too much of a surprise that a budget cut is needed.
This marks the second notable (or third, if you count Bitmain’s local division) Israel blockchain layoff in recent months.
Per previous reports from Blockonomi, First Digital Assets Group (FDA), a multi-faceted blockchain startup, laid off a majority of its employees. As a part of this business shift, FDA purportedly purged its resident research division, One Alpha. The Israeli upstart also put its K1, Stamina, Titan, and Knox ventures on the backburner, merging a majority of these subsidiaries’ facets with the parent group.