Ethereum-based startup incubator and blockchain technology conglomerate ConsenSys is fast spinning off startups, which could lead to the company laying off up to 50-60% of its workforce, according to a Dec. 20 report from The Verge.
ConsenSys operates a startup incubator called ConsenSys Labs that is believed to be home to around 36 startups, with each employing between 5 and 50 staff.
Now many of these teams are expected to be spun off as part of a restructuring plan that will see numerous projects that are yet to develop a revenue-generating product become standalone startups, and it is claimed in some cases, left without enough financial runway to procure outside funding and succeed.
According to the report, ConsenSys representatives did not deny the impending layoffs when approached for comment, adding that the company was “determining a path forward [for each project], whether that will be internally as part of ConsenSys 2.0, or as an external entity.”
The news comes less than a month after Coindesk reported that Consensys was letting go of 13 percent of its staff as the company looked towards a “re-focusing of priorities”.
Ethereum Co-Founder and ConsenSys CEO, Joseph Lubin personally funds ConsenSys and its family of startup projects from his personal cryptocurrency stash, and the spinoffs have likely been forced by the collapsing Ether price. Forbes have estimated that almost all ConsenSys businesses are in the red, with the entire ConsenSys ecosystem burning more than $100 million cash per year.
Joseph Lubin — whose crypto portfolio is presumed to be worth more than $1 Billion — said on Twitter that ConsenSys remains healthy and that the rebalancing activities were planned as early as nine months ago, adding that:
“Peeking into 2019, if you could see the landscape through my eyes, you’d have to wear shades.”