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ConsenSys lays off 14% of staff as a result of COVID-19

ethereum blockchain

Yesterday Ethereum development studio ConsenSys said it plans to lay off 14% of its staff in response to the Coronavirus pandemic, according to a report from ConsenSys-backed Decrypt.

CEO and founder Joseph Lubin delivered the news at an all-hands remote Zoom meeting after exploring other options. “I consulted numerous people both inside and outside of the company. I pursued conversations with potential investors. I reviewed government assistance programs. I explored ways to collaborate with other projects in the ecosystem,” said Lubin.

It follows a February restructuring in which the investment side of ConsenSys was split from the core. ConsenSys now focuses on blockchain infrastructure and tools, as well as a consulting division for enterprise blockchain. At that stage, there was a 14% reduction in headcount after cutting 13% in 2018.

We speculated that the split earlier this year was to change the structure away from a mini conglomerate to attract outside investment more easily. 

The mix of enterprise blockchain consulting and blockchain infrastructure was always a smart idea as the two don’t necessarily move in sync. Certain aspects of enterprise blockchain focused on digital transformation may be less impacted by the Coronavirus Crisis. 

For example, komgo is in trade finance, a sector that stands to benefit from the Crisis because there’s a critical need for digitization. However, komgo currently focuses on oil, and it was hard to miss yesterday’s headlines that oil futures for May delivery are currently trading at negative prices. Other projects include anti-counterfeit measures for luxury goods company LVMH and the agribusiness supply chain consortium Covantis backed by Cargill, Bunge and others.

ConsenSys also has a group focused on central bank digital currencies, which is a hot sector at the moment.

Initially, the blockchain infrastructure side was focused on public blockchain. Over the past year or so there’s been a greater emphasis on the enterprise side. However, in some cases, that’s to attract enterprises to public blockchain. 

For example, ConsenSys’ PegaSys open sourced its enterprise blockchain protocol as Hyperledger Besu and it can be used on the public Ethereum Mainnet as well as for permissioned networks. ConsenSys, along with EY and Microsoft, is one of the drivers behind the Baseline Protocol, a set of tools targeted at enabling greater confidentiality to make enterprises more comfortable using the public Mainnet.

Meanwhile, Joseph Lubin is known as the original financial backer of Ethereum before its ICO. As a result, ConsenSys’ funding is linked to the price of the ETH token. Around the time of the February layoffs, the ETH price hovered around $185. Later that month, the token briefly hit $280 before crashing to $112 at the depth of the crisis in March. Yesterday the price was $172. But as will all market prices during the COVID-19 Crisis, who knows what the future holds.