Steemit, a popular blockchain-based social media platform, has laid off more than 70% of its workforce according to an announcement by founder and CEO Ned Scott. This is largely due to the crash in cryptocurrency prices during 2018. The native cryptocurrency of Steemit, STEEM, has declined from nearly USD 8 in January 2018 to USD 0.30 on 26 November. Steemit depends on selling STEEM at regular intervals for cash flow and, therefore, operational cash is now drastically reduced until the market rises again.

The price of STEEM is actually up 20% today at USD 0.37, so it appears investors find this news to be favorable. Cuts in the number of employees and infrastructure costs are being undertaken to ensure the survival of Steemit long term. Scott says, “However, in order to ensure that we can continue to improve Steem, we need to first get costs under control to remain economically sustainable. There’s nothing that I want more now than to survive, to keep steemit.com operating, and keep the mission alive, to make great communities.”

In addition to laying off 70% of its workforce, Steemit is cutting costs by replacing steemd plugins with hivemind, reducing the chain state size, reducing staging and testing nodes, eliminating redundancies, closely monitoring Amazon Web Service (AWS) usage, and in general will be restructuring all operations to reduce spending.

This layoff at Steemit comes only two months after the Steem velocity hard fork, which touted major improvements to code and usability, but for the most part increased the cost of posting on Steemit by basically requiring users to buy more Steem Power (SP) to be able to post as much as they want to. The price of STEEM has fallen 70% since the velocity hard fork was implemented, and Steemit’s Alexa rank has declined from about 2,200 to 3,646 as of 28 November.

 

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