Steemit restructures with 70% job losses, citing crypto slowdown

Decentralised publishing and content distribution platform Steemit has become the latest blockchain company to feel the heat, as the slowdown in legacy cryptocurrency markets continues to bite.

According to a statement from the firm, as much as 70% of its workforce will now lose their jobs, suggesting “the weakness of the cryptocurrency market, the fiat returns on our automated selling of STEEM diminishing, and the growing costs of running full Steem nodes” were behind the decision.

Steemit was launched to significant fanfare back in 2016, as a way of rewarding content creators for their work through cryptocurrency payments. Powered by its on-platform currency STEEM, Steemit was at one point regarded as one of the leading examples of a decentralised app for blockchain.

Staff members who survive the cull will be tasked with focusing on finding other ways of reducing costs and rolling back the size of the Steemit blockchain, with a view to decreasing the firm’s reliance on Amazon AWS.

CEO and founder Ned Scott said that while the platform still had potential, there was little option but to get costs under control.

According to Scott, “We still believe that Steem can be by far the best, and lowest cost, blockchain protocol for applications and that the improvements that will result from this new direction will make it far better for application sustainability. However, to ensure that we can continue to improve Steem, we need to first get costs under control to remain economically sustainable.”

One of the first dApps of its kind, Steemit was set up to allow users to submit content and get paid for their work. In the recent crypto market slide, the platform’s STEEM coin has been badly hit, losing as much as 96% of its value. As of today, STEEM was trading at $0.37.

The ongoing crypto bear market, dominated by the ongoing crypto sell-off, has put significant pressure on decentralised apps like Steem. The Civil platform is another which has struggled in recent weeks, after being forced to refund early investors in its CVL tokens.

It remains to be seen whether apps like Steem and Civil now have the staying power to cling on under such persistently difficult market conditions.