New York’s Blockchain Company R3 Cuts Workforce by 20% due to Lower-than-Expected Adoption
New York-based blockchain firm, R3, has made the decision to downsize its workforce by more than 20% in an effort to cut costs. The company attributes this move to lower-than-anticipated adoption rates in the financial sector. While R3 has experienced success with central banks, other projects have failed to perform as expected, resulting in a negative impact on revenue.
While specific figures have not been disclosed, anonymous sources have revealed that multiple departments within the company will be affected by the downsizing. Trade finance and insurance are among the areas that did not meet expectations.
In 2017, R3 secured $107 million in funding from over 40 institutions, including major players like Barclays, UBS, and Wells Fargo. However, recent data from PitchBook indicates a significant decrease in funding for digital asset firms in Q2 2023 compared to the same period last year. This decline has prompted many crypto companies to tighten their budgets and implement layoffs.
Industry-wide Layoffs Reflect Challenging Landscape for Startups
The downsizing at R3 is just one example of the challenges faced by startups in an unpredictable industry. Other crypto companies, such as Crypto.com and CoinDesk, have also implemented substantial layoffs to manage their finances. Additionally, regulatory pressures have led to the resignation of top executives at Binance in various regions.
However, it’s worth noting that this trend extends beyond the crypto and blockchain sector. Even tech giant Google recently announced layoffs in its recruitment division. These workforce reductions demonstrate the difficult terrain that startups must navigate in order to achieve financial sustainability.
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