Creators Of Andreessen Horowitz-Backed Cryptocurrency Filecoin Fires 21% Of Staff After Raising Record $205 Million

One of Web3’s earliest pioneers, Protocol Labs, has laid off 89 people, or more than a fifth of its total staff according to documents reviewed by Forbes. The information was provided by one of the fired employees, who asked not to be identified to respect their privacy. These firings add to a growing trend of staff reductions in the crypto industry, where more than 26,000 employees have been laid off.

In 2017, Protocol Labs raised $205 million to build out a network of personal computers that agreed to share their unused computing power in exchange for the filecoin cryptocurrency, in what was at the time part of a record initial coin offering (ICO). $52 million dollars of the capital came from a pre-sale of the asset to ​​Sequoia Capital, Andreessen Horowitz, Union Square Ventures and others.

The filecoin cryptocurrency is currently trading flat at $5.63 over the past day, according to CoinMarketCap, with a total market cap of $2.1 billion.

Documents seen by Forbes show that at least some of the employees are receiving “garden leave,” meaning they’ll continue to be paid after their last day, which is today, February 3. Continued benefits will include financial assistance, COBRA healthcare, immigration support, and job placement support.

“The decision to let go of a number of valued members of our team is a result of the current market conditions and the macroeconomic challenges we are facing, specifically in relation to filecoin dynamics. ” according to a document titled “FAQs for Departing Labbers.”

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Protocol Labs CEO Juan Benet wrote in a blog post that high inflation leading to high interest rates, contributed to a worse “crypto winter, making it more extreme and potentially longer than our industry expected.” He added: “Sometimes we face tough setbacks, but we forge ahead.”

Protocol Labs was originally described as a decentralized competitor to cloud services provided by Google
, Amazon
, Microsoft
and others. Protocol Labs is also the creator of the Interplanetary File System, commonly known as IPFS, which is used by many non-fungible token (NFT) creators to store image files tied to the digital assets.

Update: The quote from Juan Benet was added after publication. The total capital raised was corrected