Ethereum browser startup Status.IM is cutting a quarter of its staff due to the ongoing downturn in cryptocurrency prices.
Announcing the move internally on Monday, co-founder Jarrad Hope said that the startup is much larger than can be sustained due to the fact that the company did not anticipate ethereum’s price dropping more than 80 percent.
COO Nabil Naghdy first publicly confirmed the layoffs when reached by CoinDesk on Friday.
The company originally raised 182,000 ETH during a token sale last year, which was worth $64 million at the time (at present prices, the same amount of ether is worth roughly $15.5 million). Status.IM also did not have “solid banking partners” until the second quarter of this year, exacerbating the issue, he said.
As such, Status.IM cut 25 percent of its staff – about 25 individuals – on Monday. Those laid off are considered “non-essential” to the project’s long-term goals, according to Hope.
The company is looking to stretch its fiat currency holdings to cover its expenses for roughly another six months. Status is also asking current employees to accept pay cuts, “which will alleviate as the market picks up,” Hope said. Employees will then receive a greater amount of SNT tokens “to help offset the cut.”
Still, this may not be enough, as Hope went on to explain:
“The reality is that we will have to make another assessment end of Q2 which if the market hasn’t picked up we will be forced to make the organization even leaner, and the remaining fiat and our large ETH holdings will be used to create a runway measured in years.”
The startup’s priorities over the next several months are to deliver on promises made in its white paper and “get the app into a usable state,” he wrote.
Naghdy told CoinDesk that, despite the cuts, “we continue to have a large and stable engineering team” working on both the white paper promises and an ethereum 2.0 implementation dubbed Nimbus.
Aside from the fiat holdings, Status has roughly 190,000 ETH to tap as a resource, Naghdy said. The company’s six-month runway is solely based on the fiat holdings, and the company does not have any current plans to pursue further fundraising.
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This article has been updated for additional clarity.
Source: CoinDesk