Another crypto company has been forced to cut staff levels in a sign that the crypto winter is not only showing no signs of easing, but it’s in fact getting worse. Hosho, a smart contract auditing company founded in 2017, has revealed that it cut its workforce from 37 to just 7 in late 2018, a reduction of 80%, due to business being so bad. Hartej Sawhney, co-founder and president, told Coindesk that he had pinned the hopes of the company on the burgeoning ICO industry, but the collapse of the entire market, and the reduction in the number of ICOs interested in their services, saw the company’s income drop dramatically.
Moon Mission Aborted
By launching in July 2017, Hosho had a perfect entry into the crypto market, and as such didn’t seek venture capital funding, relying solely on revenue. This served them well during 2017 and into 2018, but by June 2018 the situation suddenly became critical as coin valuations collapsed and ICOs stopped getting their smart contracts audited to save money. At this time the lack of financial backing in Hosho became critical. Sawhney states that he was offered bribes and kickbacks to give smart contracts a clean bill of health but he refused, even though it could have kept the company operating at existing levels at the time. They also put a lot of money into a conference, HoshoCon, but only sold 350 tickets, losing more money.
Hosho Not Alone
Hosho’s problems highlight a huge and growing issue within the cryptocurrency landscape at the present time, issues that mirror what happened after the dot com crash in the early 2000s where many companies went under and thousands of jobs were lost. By restructuring and looking for other revenue streams, such as a penetration testing service, Sawhney hopes that Hosho can be one of the few companies that will emerge from the ashes of this cycle. But, with the bear market showing no signs of letting up, it will be a struggle for even the biggest to pull through without further damage.