Singapore-based NEM Foundation is under clutches of the crypto bear market as it is planning a massive layoff following harsh budget cuts, the company announced in a community post.
The organization is forced to restructure its current teams as in a recently published blog post it states: “The XEM exchange rate has suffered catastrophic drops from this time a year ago, just as many other ambitious cryptocurrency projects have suffered, now the NEM Foundation is facing challenging budget decisions. We are in a tough spot like many others in this space. It is our duty to act quickly to ensure the longevity of the NEM Foundation ecosystem and development.”
According to a Coindesk report, Alex Tinsman, the newly elected president of the NEM Foundation, is considering to submit a funding request to the NEM community to raise 160 million tokens worth around $7.5 million in an attempt to pull the company from the verge of bankruptcy.
“Basically we realized we had a month to operate, due to the mismanagement of the previous governance council,” Tinsman told Coindesk.
However, the funding request needs to have the consent of the Foundation’s 202 members as they will be asked to vote on the decision in February.
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Tinsman further revealed that, between December 2017 and January 2019, the foundation spent around 80 million XEM tokens in marketing. However, with the cash crunch, the NEM Foundation is reconsidering its spending and has decided to halt all marketing campaign.
“We’ve reduced marketing activities because it doesn’t make sense to market a product that isn’t out yet,” Tinsman added.
The meteoric rise of the cryptocurrency prices and the hype of the new blockchain sector laid the path for the establishment of a ton of blockchain companies. However, the year-long bear in the market has now started to impact on the firms’ businesses.
Similar to the NEM Foundation, many blockchain companies – big or small – are now restructuring their budget allocation, which is mostly resulting in massive cuts of workforces. Bitmain, the Chinese Bitcoin miner manufacturing giant, is reportedly planning to lay off 50 percent of its employees following the sacking of an entire team just a month earlier.
Crypto exchange Kraken is also reacting with a similar approach to its budget constraints as the company fired 57 employees form its Canadian office, according to a previous Finance Magnates report.