Steemit Inc. lays off 70% of their employees!!

[eternalgloom]

The founder of Steemit, Ned Scott has announced that they have been 'forced' to layoff close to 70% of their employees, due to rising infrastructure costs & the failing cryptocurrency markets.
He made the announcement on his personal Steemit blog yesterday.

There's been an overwhelmingly positive response from the community, with people starting up initiatives to keep the Steem project going through community-run efforts.

Check out the announcement here: https://steemit.com/steem/@ned/2fajh9-steemit-update

Dear Steemians,

Steemit, Inc. is currently undergoing a structural reorganization which I believe is important to share with the community. Steemit Inc., is a private company that runs the open-source steemit.com, a decentralized app on the Steem blockchain. Steemit Inc., also uses some of its resources and engineers to contribute code updates to the Steem blockchain. In addition, we provide APIs to third party developers at our own expense to help grow the developer ecosystem.

Given 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, we have been forced to layoff close to 70% of the team. The remainder of the team is staying on to focus primarily on reducing the costs of the infrastructure running steemit.com and our public APIs, and ensuring that the community can remain informed of developments.

We have conducted our first all-hands meeting and are prioritizing all the cost reduction solutions we can accomplish in the near term, including replacing steemd plugins with hivemind, pitchforking Steem to prune the chain state size from 160gb to 0gb, AWS usage projections, DevOps solutions, reduction of Staging and Testing nodes, and eliminating redundancies.

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, 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.

There are two reasons I’m in cryptocurrency: first, I came in because I believed in the potential of cryptocurrency to give us greater freedom through unrestricted value transfer, value store and all the financial tools that come along with that, which can empower us like few technological innovations have. The second reason I stay in cryptocurrency, is because it has the potential to spawn the next killer application that can rival the Instagrams and Reddits of the world, and that fuels the mission to make great communities, which need unrestricted access to financial tools.

Over the last many months, along with a hyper-talented team, I have gone back to the drawing board and figured out the remaining challenges that are acting as barriers in the way of that killer application and making great communities. In that time we have created many assets that will help us accomplish this mission. Over the next several weeks, despite our course for bringing these products to the world being changed, I hope to share the assets we have created with you, including showing you how their success would be a benefit to Steem and cryptocurrency in general.

I would like to thank all of our employees and contractors for their months and years of dedication and hard work. It is incredibly difficult to part with these great people who I have gotten to know well and respect. I am deeply grateful to the many contributions to our mission. In order to minimize the impact on these people, we are doing as much as we can to smooth their employment transitions. Everyone who has assisted us are outstanding individuals that any organization would be lucky to have.

Source: https://steemit.com/steem/@ned/2fajh9-steemit-update

[Classica35]

I believe they have other reasons behind this ordeal, part from the present situation of the market? That the market is down should not be enough basis to lay off such large number (70%) of worker, which to me is just too much.
Do they expect the market to continue to go uptrend?
Let me say other enough things and not, because of the market that has plummeted.

[eternalgloom]

I believe they have other reasons behind this ordeal, part from the present situation of the market? That the market is down should not be enough basis to lay off such large number (70%) of worker, which to me is just too much.
Do they expect the market to continue to go uptrend?
Let me say other enough things and not, because of the market that has plummeted.

Well, he also mentioned rising infrastructure costs. They are working on lowering those costs though:

We have conducted our first all-hands meeting and are prioritizing all the cost reduction solutions we can accomplish in the near term, including replacing steemd plugins with hivemind, pitchforking Steem to prune the chain state size from 160gb to 0gb, AWS usage projections, DevOps solutions, reduction of Staging and Testing nodes, and eliminating redundancies.

I'm not sure how much Steem they've been selling off for keeping themselves afloat, but I suspect they are selling quite a lot on a weekly/monthly basis.

[hongus]

Do you believe everything they say? They just claimed 70% of the Team to fix their profits. And they themselves have undermined their ecosystem with the latest revelation. And even now in Steemit such a number of bots that perhaps this site will come to an end.

[eternalgloom]

Do you believe everything they say? They just claimed 70% of the Team to fix their profits. And they themselves have undermined their ecosystem with the latest revelation. And even now in Steemit such a number of bots that perhaps this site will come to an end.

Where do I state that I believe everything they say? I'm pretty active on Steemit, so I've seen some first hand responses from the community.
What is it that you don't believe from this statement? The reasons given?

About the bots you've mentioned. Yeah that's a pretty big issue indeed, they're in part responsible for the fact that it's increasingly more difficult to get any sort of decent rewards when you're not using them.
It also gives people a false sense of success, thinking they can earn hundreds of dollars for a single post. While in reality they've been upvoted by bots.

[Ewinsane]

I never understood their model anyway. They basically did what medium has been doing for years but added money to it as well. I mean it is great and all when there is money involved but when the market is like this no one wants to give out money, even at a small fractions they want to keep their money to themselves.

Hence, there has been a very steep decline in interest towards steemit and many moved on to medium once again, or basically moved back to medium to be precise since that was the original one. Steemit will be dealing with these troubles for a lot long time unless prices go back up again, if that doesn't happen I can see them closing shop eventually. They won't be done anytime soon for sure but they will get smaller and smaller in time and eventually there will be no need to keep it up.

[hesham51]

Even in Crypto projects!!!!! , When it comes to reduce the burden of OPEX in businesses , the first thing dawn on mangers's brains lay off the employees and sure keep the managers enjoying all benefits.Anyway it depends on how many employees they lay off.

[eternalgloom]

I never understood their model anyway. They basically did what medium has been doing for years but added money to it as well. I mean it is great and all when there is money involved but when the market is like this no one wants to give out money, even at a small fractions they want to keep their money to themselves.

Hence, there has been a very steep decline in interest towards steemit and many moved on to medium once again, or basically moved back to medium to be precise since that was the original one. Steemit will be dealing with these troubles for a lot long time unless prices go back up again, if that doesn't happen I can see them closing shop eventually. They won't be done anytime soon for sure but they will get smaller and smaller in time and eventually there will be no need to keep it up.

I think you're misunderstanding one thing about Steemit. When you upvote someone (aka giving out money), you don't actually lose money yourself.
The value of your upvote is determined by the amount of Steem Power (vested steem) in your account. You also receive curation rewards for upvoting other people.

Okay, you could also just self-upvote or delegate that Steem Power to bots for increased rewards, but I haven't personally seen a decline in received upvotes.

The upvote bots are a far greater problem IMO. The whole trending page is filled with artificially upvoted posts.
This causes great disillusion for new members, who see these posts get +$200 in rewards, thinking that they can also achieve that.
When they find out that they're stuck on earning $0.10 for a post, they usually find out that it's pretty hard to make any sort of money there.

You really need to join many different communities in order to organically get rewards.

[anobtc]

It is understandable that in the Bearish market in 2018, Steemit's capitalization has diminished considerably. They do not have the funds to maintain the company, and layoffs are inevitable.

[talkbitcoin]

steem and steemit have been flawed from the beginning. it was doomed to fail anyways. in the beginning they started paying a lot of money to anyone who spammed on their platform so that attracted a lot of people but slowly it dropped down and the place was filled with spam and eventually considered a bad place for reading anything as a source. i personally prefer this forum a lot more and medium.com a lot better.

with that said it is not out of ordinary for them to shrink their staff to reduce their cost so that they can survive a little bit longer.
i wonder if they also have any plans on pumping the coin?

[eternalgloom]

I don't think they have any plans on pumping the coin themselves, they're actually selling Steem every week to keep operations afloat.
Yeah Medium is a lot better quality wise, but things have somewhat improved on Steemit compared to the early days.

There's still a lot of spam though...