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 300,000 ETH during a token sale last year, which was worth $105 million at the time (at present prices, the same amount of ether is worth roughly $25.2 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 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.
Editor's note: This article has been updated for additional clarity and to correct the amount of ETH raised during the ICO.
Empty desk image via Shutterstock
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.