NEM Foundation Plans Layoffs And Pivot To Avoid Bankruptcybr>
The NEM Foundation, a Singapore-based non-profit organization set up to promote NEM’s blockchain technology globally, is planning a massive layoff to avoid bankruptcy.
In a blog post, the foundation said that after the XEM exchange rate suffered catastrophic drops from this time a year ago, it is now facing challenging budget decisions. The foundation has been forced to restructure its current teams after seeing them working hard, but not aligned with the same goals.
“We saw efforts being duplicated, and inconsistent metrics of success,” the foundation said. “We saw very little accountability for funds and questionable ROI, leading to a burn rate of 9 million XEM per month. In terms of running an effective organization, the existing structure failed. Maybe that didn’t seem like a big problem when the XEM price was high, but it’s a very big problem as we seek to sustain a viable organization in the “Crypto Winter.”
After the new council arrived on January 1, the foundation said they agreed to completely rebuild the foundation’s operating structure and mission, adding that they are hitting refresh and starting from scratch. The foundation will reportedly transition from a promotional-focused organization to a product-focused organization.
Regional teams will be replaced with newly created product-focused teams, the heads of which will be responsible for reporting metrics and delivering ROI directly to the council and community to maintain transparency and accountability. All funds spent will flow through the head of finance and adhere to consistent accounting standards. The council will be focused on oversight and will not be directly involved in operations.
Alex Tinsman, the newly elected president of NEM Foundation, said in a statement that he is considering to submit a funding request to the NEM community to raise 160 million tokens ($7.5M USD) in an attempt to pull the company out of the verge of bankruptcy. The foundation’s members will be called in to vote on the funding matter next month.
“Basically we realized we had a month to operate, due to the mismanagement of the previous governance council,” Tinsman said.
According to the foundation, the reality of having one month left in funding means they won’t be able to support their entire staff of 150 employees, partnerships, and projects.
“We need to put everything on hold,” the foundation said. “This is painful since it hurts good people and partners, but the new council is aligned that we need to be transparent with what is happening behind the scenes of the NEM Foundation… A message to the hardworking staff and loyal team members, words cannot describe the difficult decisions we had to make to come to this point. We are only one month old as the new council, and to face the facts of where we stand is horrific.
The NEM Foundation is the latest crypto firm to lay off staff to cope with crypto winter. Other crypto firms that have downsized and cut staff include Bitmain, ConsenSys, Huobi, Kraken and Blockfolio.