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ConsenSys May Be Making More Substantial Layoffs

ConsenSys, a venture studio for Ethereum-based projects, is planning to spin off most of its startups — and that may mean laying off 600 or more of its 1,200 employees, according to The Verge.

The idea that 50 to 60 percent of ConsenSys employees might be laid off “is entirely not correct,” he says. But he confirmed that some project teams—he pegged the number at about seven—have indeed been presented with a stark choice about their future, one which may leave little opportunity to remain part of ConsenSys.

Update: A "source at the company" told Breaker Mag that the notion that "50 to 60 percent of ConsenSys employees might be laid off 'is entirely not correct,' ... But he confirmed that some project teams — he pegged the number at about seven — have indeed been presented with a stark choice about their future, one which may leave little opportunity to remain part of ConsenSys." Breaker Mag is owned by SingularDTV, which has a partnership with ConsenSys.

ConsenSys Labs, an incubator arm of ConsenSys, has birthed more than 30 Ethereum-based startups (called “spokes” by the company).

The Verge reported that Labs will no longer act as an incubator. Instead, it will act more like a traditional investor. That means most of the spokes are going to have to leave the parent company, and many will not have the support or funding to survive.

The only projects that ConsenSys Labs is keeping are those focused on core developer tools for building Ethereum apps. Those projects include Infura, MetaMask, PegaSys, Alethio, Kaleido and Truffle.

According to The Verge, the projects that are getting pushed will be given a choice between “two months of severance [pay] or an equity stake of nearly 10 percent and a convertible note that would represent around a month of a spoke’s burn rate as part of a deal for a spin out.”

Some spokes have at least until February to mull over the offer. Spoke teams range from five to 50 people.

One source told The Verge that ConsenSys has not created a list of projects to be spun out because “they’re afraid of everything going to the press.”

“These days, the mood at ConsenSys is bleak; it’s clear the freewheeling days of expensing $14,000 in two weeks or buying day-of Emirates business-class tickets are over,” one source told The Verge.

Joseph Lubin, a cofounder of Ethereum, launched ConsenSys in 2014. He is rumored to be a crypto billionaire and one of the biggest investors in the Ethereum crowdsale. Lately, the price of ether has plummeted, falling from an all-time high of $1,300 in January to about $100 today.

The news of the potential layoffs comes just a month after ConsenSys laid off around 13 percent of its staff and Lubin sent out a letter describing a “ConsenSys 2.0” and plans to revert the company into a “lean and gritty startup.”

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