ShapeShift CEO Erik Voorhees announced on Tuesday that his company has laid off 37 of its employees, due to the current downturn in the cryptocurrency market. Voorhees noted in his online post that the layoffs have reduced the size of ShapeShift’s team by one-third.
After highlighting the company’s rapid 3,000 percent growth during 2017, Voorhees said that the volatility of crypto markets can make it difficult for fast-growing companies to navigate downturns like the current bear market. While acknowledging that acceptance of that volatility required accepting the inherent risk, he called the layoffs ‘painful.’
He also expressed regret to the employees directly impacted by the layoffs:
“Regardless, separating so many from our team is painful. To those valued individuals who stepped off our ship today: I am sorry this happened. Your confusion, your sadness, your anger… all of it is understandable, and I am sorry to put you through it. Your contributions — of effort, of personality, of experience — remain part of our fabric. Though it has ended, we are improved by our time with you, and I hope you find yourselves improved by your time with us.”
Voorhees also offered a transparent examination of what he called the company’s recent “mistakes” – which he suggested played a role in this week’s layoffs. He said that ShapeShift’s attempts to diversify its product lines was premature and drew the company’s attention away from its core business. He also took the blame for neglect of the company’s people, structure, and internal communications – mistakes that the company failed to understand until it was too late:
“[T]he profound and intense bull market of 2017 hid the lessons from our view. Everything was going well. Hundred percent growth every month has a way of obfuscating reality.”
In his remarkably candid assessment of ShapeShift’s recent mistakes, Voorhees concluded that the company grew too fast, and his leadership team was too inexperienced to keep pace with the evolving needs of a rapidly-expanding team. He also cited the team’s struggle to navigate new regulatory terrain and the legal costs associated with that effort, customer issues related to the company's KYC implementation, and the impact of declining crypto asset value on ShapeShift's balance sheet.