NEM Foundation, the parent organizations behind 18th largest cryptocurrency, is almost on the verge of collapse. The foundation is now planning layoffs and organizational restructuring to survive.
The world of cryptocurrencies is a weird one. In this world you may be among the richest and the largest, but you may still be broke and at the verge of a collapse. Something similar is playing out with NEM Foundation, the non-profit group behind XEM cryptocurrency. XEM is currently world’s 18th largest crypto by market cap, but NEM Foundation is almost on the verge of a meltdown. The financial situation of the company is very troublesome, and now the Foundation is counting on about $7.5 million of funds to be raised from its community fund in order to survive.
That’s right. NEM Foundation’s recently elected new President Alex Tinsman recently spoke to Coindesk about what’s going on behind the scenes. And according to him things are not looking very good, because the only money that foundation has got can keep NEM afloat for a month. Therefore, a request has now been made to NEM Community Foundation for transferring 160 million tokens. He said:
“Basically we realized we had a month to operate, due to the mismanagement of the previous governance council.”
Now the next thing to happen is voting. The 202 members of NEM Foundation will now be asked to vote on the funding request. A number of organizational restructuring and cost-cutting measures will also be taken to ensure the improvement in financial health of Foundation. And the chief measure among them are layoffs.
Saving the sinking ship
In order to save the sinking ship of NEM Foundation its new president Tinsman has announced layoffs, reduction in marketing activities and other cost-cutting measures. The number of layoffs will be determined based on how much funding is approved by the community, but one thing has been announced already by Mr. Tinsman: reduction in marketing activities. Blaming the previous leadership of Foundation for spending 80 million XEM on marketing alone she said:
“We’ve reduced marketing activities because it doesn’t make sense to market a product [Catapult] that isn’t out yet.”
Besides layoffs and reduction in marketing expenses the project teams in Foundation will also be given specific budgets. They’ll also be required to provide more open-source documentation of their progress making tools for NEM ecosystem.
Finally, Ms. Tinsman said that she also plans to monetize the activities of NEM Foundation in 2019 itself by starting enterprise training and affiliate marketing programs. This will be done to reduce the reliance of foundation on community grants.
Now it will be interesting to see how much funds are provided to the foundation by its community fund members. Also, it will be worth seeing how many employees are asked to go.