Steemit, the company behind the decentralized media platform and the token STEEM, has announced that they are being forced to layoff “close to 70% of the team”. This news comes as they struggle to continue operating during the crushing bear market. In a Steemit post, co-founder and CEO of Steemit Ned Scott stated that the weakness in the cryptocurrency market, and the resultant drop in the price of STEEM, had drastically reduced their income. Stuttering performance has led to unfortunate action needing to be taken in the form of layoffs.
Bear Market Takes its Toll
STEEM, like all cryptocurrencies, has taken a battering this year, falling from a high of $8 to a current price of just $0.37, representing a 95% fall in price. The price of running nodes, essential to operating a decentralized system, is at the same time increasing, according to Scott, which has compounded the problem. A number of technical changes will also be implemented to reduce outgoings Scott added, with the number one aim being to simply keep the project going:
However, in order to ensure that we can continue to improve Steem, we need to first get costs under control to remain economically sustainable. There’s nothing that I want more now than to survive, to keep steemit.com operating, and keep the mission alive, to make great communities.
The reaction to the news was surprisingly unsympathetic, with comments on social media mentioning the large premine of STEEM tokens, the negative influence of co-founder Dan Larimer and the seemingly bad business model:
Looks like Steemit, Inc. is close to going belly-up and laid off 70% of their staff. How is that even possible when they mined & auto-sold almost 1/3 of the entire token supply over the years?
Must be a blatant case of treasury mismanagement/negligence. https://t.co/Zov3AREyHN
— Hasu (@hasufl) November 28, 2018
Comments from Steemit investors were equally scathing, with complaints that “Communication, planning and delivering was almost nonexistent”, while another investor expressed concerns of the “constant failures” within the project. A third laid the problem at the CEOs door, stating that “what’s acting as the ‘biggest barrier’…is ned himself” while another commenter felt that Scott was “young and naïve”.
In spite of the negative tone, many fans seem to see the workforce reduction and the renewed focus as a chance to rejuvenate the platform and regain its focus, confident that if Scott can turn the problems around Steemit could still have a very bright future.
Steemit Not Alone
If the decision to drastically reduce the workforce wasn’t a sign that all isn’t well in the Steemit camp, then the reaction to the news, from supporters especially, certainly should be. Steemit is likely not the only project feeling the pinch right now, and it is probably only a matter of time before more projects need to act in a similar way, if they haven’t already, before they have to close doors for good.