Crypto Winter Hits ShapeShift as it Lays Off 37 Employees
ShapeShift looked to have had an amazing 2018, launching new services and products across the board. However, it appears as if the crypto winter has hit the crypto exchange significantly as ShapeShift’s CEO – Erik Voorhees – announced that the company is letting 37 people go. The move to lay off a third of the current team comes as a bit of a shock to the crypto world, and could be indications that more members will be let go in the coming weeks – much like we saw with Bitmain.
Four Key Issues in 2018
Voorhees seemed rather regretful in his announcement and he took all the blame upon himself for the layoffs. However, he pointed to four key points that contributed to the company’s side to the point it had to let staff go.
ShapeShift grew more than 3,000% in 2017 and this meant that people without the proper leadership experience were managing large groups of teams that they simply couldn’t handle. It all happened so fast there was no time to vet the perfect candidate or train those already working at ShapeShift.
Customer Drop Off
Obviously, the crypto winter that was 2018 saw declining numbers of traders, and this meant that ShapeShift wasn’t pulling in enough money. Despite valiant efforts put in by all team members, nobody knew just how far crypto markets would fall and how badly it would hit the company’s books.
Midway through 2018, ShapeShift became a victim of the KYC regulations that jurisdictions were rolling out. This legal trouble forced ShapeShift to pause key projects it was working on in order to perfect its KYC process and find some way to motivate its users to stick around after the KYC was launched. ShapeShift finally launched KYC back in September 2018, but the bills from the legal troubles were still enormous and took a toll on the company’s bankroll.
Finally, just like every other company that solely works with crypto, 2018 saw ShapeShift make less money than it needed to survive with its mounting bills. As a decentralized exchange, its services still remained largely niche and meant that it took a bigger hit than mainstream exchanges like Coinbase or Gemini. According to Voorhees, ShapeShift had already lost way too much before December and its further price falls.
Too Many Side Projects
Another area that Voorhees touched on was the enormous amount of side projects that ShapeShift took on. One of the most successful side projects however, is still being used by millions of holders around the globe and will continue to do so for the foreseeable future. ShapeShift teamed up with Trezor to allow holders to exchange cryptos directly from within their wallet – a pretty cool feature for crypto investors on the go who want to make instant trades. While side projects like this have been a major success for the company, there were just too many that flew under the radar and failed to bring in the big bucks.
Layoffs All Around the Crypto World
Voorhees and ShapeShift needn’t feel too bad about the layoffs they had to make, dozens of other firms have had to follow suit – including some of the biggest names out there. Bitmain is just one of these firms, laying off more than 50% of its staff before the end of 2018 sent shockwaves through the crypto mining community. Bitmain laid off its entire Bitcoin Cash Go client development team and Jihan Wu allegedly stepped down as CEO. If giants like Bitmain are struggling in this crypto winter, it’s no surprise that ShapeShift is struggling too.
It’s never nice to see employees let go due to financial restrictions, but in order to save the project and give it a fighting chance to repair the damage and recover, these steps were necessary. 2019 is still very young and the months ahead will likely bring new opportunities for those seeking jobs in the crypto world.