Consensys cuts workforce by 20%, cites macroeconomic and regulatory challenges

ConsenSys, the blockchain software firm behind popular crypto wallet MetaMask, will lay off a significant portion of its workforce, founder and CEO Joseph Lubin announced.

The layoffs will affect approximately 20% of the company’s staff, Lubin said in his announcement published Oct. 29. ConsenSys CEO explained the reasons behind the “difficult decision” to lay off 160 employees.

According to Lubin, who is also the co-founder of Ethereum (ETH), the decision to downsize comes amid challenges from a challenging regulatory environment. ConsenSys also strives to streamline operations while combating macroeconomic pressures.

“Today, we are making the difficult but prudent decision to streamline our operations to position Consensys to provide continued rapid innovation, long-term sustainability under potentially variable scenarios, and continued leadership in the web3 space.”

This move will help the company remain competitive, he added.

In terms of the macroeconomic landscape, Lubin noted the impact of tightening liquidity as well as rising interest rates and inflationary pressures, factors affecting many companies in the crypto industry.

There is also the issue of regulatory uncertainty, with ConsenSys incurring legal costs in its ongoing battle with the US Securities and Exchange Commission.

“Too many cases at the SEC, including ours, represent meaningful jobs and productive investments lost because of the SEC’s abuse of authority and Congress’ failure to address the problem,” he said.

The SEC’s various enforcement actions, including lawsuits, investigations, and Wells Notices, are costing affected companies millions of dollars.

ConsenSys CEO’s words reflect a broader sentiment in the crypto space; Many people accuse the SEC and its Chairman Gary Gensler of taking an anti-crypto stance that is hurting the industry in the US.

This led some companies to sue the regulator over alleged overreach.

In April this year, Consensys sued the SEC over the regulator’s stance on Ethereum, and in October it penned an open letter to the future US president about crypto regulation.

While Consensys is trying to lay off staff, some crypto companies affected by the macroeconomic environment have begun to look for different options. Strategic options include mergers and acquisitions and initial public offerings.