Who said the BTC price doesn't matter? BitPay announces layoffs

[TruthBear]

http://www.btcfeed.net/news/layoffs/


This is huge news considering the size of BitPay. This is why businesses will continue to convert their BTC payments directly into USD (creating more selling pressure). As the price further declines, businesses that took the risk and rely on the price of BTC will continue to feel the bite.

Ouch!

[pawel7777]

What does it have to do with bitcoin price?

The article doesn't even mention that price could be a reason for lay offs.

This comes as shocking news as Bitpay becomes one of the first major Bitcoin companies to lay off employees. It is thought that the recent spate of spending may have led to a shortage of funds. The recent multi million dollar sponsorship deal that Bitpay signed with the St Petersburg Bowl is thought to be a long running commitment running till the end of next year. However the company has let slip that this was not the true reason behind the layoffs as they put it down to a simple surplus in labor and workers. The quote below displays the reasons behind the recent layoffs.


It is unknown if the layoffs reflect a systemic overspending problem at BitPay which could burn through the funds they have raised from venture capitalists, or if the layoffs were taken to address an excess of hiring beyond that necessary for their labor needs. Bitpay has historically been known for “celebrity hires” like their hiring of Bitcoin Foundation board member Elizabeth Ploshay as an account manager in the Summer of 2014.

[Troonetpt]

sure, it matters.

[Q7]

it doesn't mean that both of them are connected. Layoff could be due to restructuring to improve organizational effectiveness or to cut down on redundancy to fine tune and align towards organizational goals. The point is, it could be due to many other reasons.

[FandangledGizmo]

I think the amount of businesses accepting Bitcoin has been growing despite the downturn, my impression is that the amount of purchases made in Bitcoin has been increasing too. Given that BitPay just charges a percentage commission, I don't think their model has huge exposure to the price of Bitcoin itself and they should be doing OK.

However I speculate that more businesses accepting Bitcoin, more purchases being made in Bitcoin but the majority of businesses converting directly to fiat & creating selling pressure as you say,  is the primary driver of the crypto downturn.

I personally feel crypto is actually doing better than ever and once stable options for business gain traction like BitUSD the crypto downtrend will rapidly reverse.

[bitllionaire]

We don't really know the causes of these layoffs.

It may have been caused by bitcoin prices or it may be because of less work charge in this period.

We don't know if they were temporary workers or fixed workers

[Gleb Gamow]

That's a big 180 from what was said during the interview three days ago at CES: https://www.youtube.com/watch?v=_62Rv7R1jcY

[Elwar]

One word:

Obamacare


suck it small businesses

[tntdgcr]

I think the amount of businesses accepting Bitcoin has been growing despite the downturn, my impression is that the amount of purchases made in Bitcoin has been increasing too. Given that BitPay just charges a percentage commission, I don't think their model has huge exposure to the price of Bitcoin itself and they should be doing OK.

However I speculate that more businesses accepting Bitcoin, more purchases being made in Bitcoin but the majority of businesses converting directly to fiat & creating selling pressure as you say,  is the primary driver of the crypto downturn.

I personally feel crypto is actually doing better than ever and once stable options for business gain traction like BitUSD the crypto downtrend will rapidly reverse.

Depends, if the price going down , shuts down a % of the daily flow, and that flow is now worth 50% of what it was a year ago ... well you see where I'm going with this.

Labor and OPEX are flat costs that won't change with prices. People don't take home less just because the Exchange Rate is less, so something has to give at some point, or they need to sell more debt. Since they are raising funds and have done so, I can imagine they might just do more.

[FandangledGizmo]

I think the amount of businesses accepting Bitcoin has been growing despite the downturn, my impression is that the amount of purchases made in Bitcoin has been increasing too. Given that BitPay just charges a percentage commission, I don't think their model has huge exposure to the price of Bitcoin itself and they should be doing OK.

However I speculate that more businesses accepting Bitcoin, more purchases being made in Bitcoin but the majority of businesses converting directly to fiat & creating selling pressure as you say,  is the primary driver of the crypto downturn.

I personally feel crypto is actually doing better than ever and once stable options for business gain traction like BitUSD the crypto downtrend will rapidly reverse.

Depends, if the price going down , shuts down a % of the daily flow, and that flow is now worth 50% of what it was a year ago ... well you see where I'm going with this.

Labor and OPEX are flat costs that won't change with prices. People don't take home less just because the Exchange Rate is less, so something has to give at some point, or they need to sell more debt. Since they are raising funds and have done so, I can imagine they might just do more.

Yes, you're right even an increase in the no. of Bitcoin transactions might not offset a rapidly declining price.  I guess their $ turnover is the key number.

[Unkle]

What does it have to do with bitcoin price?

The article doesn't even mention that price could be a reason for lay offs.

This is what I was going to ask and wanted to know. I don't think it's down to the price and we have no idea how they are running their bussiness. Maybe they just need to make cuts or the number of staff they currently have is unneccesary.

[mayax]

Bitcoin is a small industry. There are so many other payment systems much bigger than Bitcoin and without making so much buzz in media

Do not forget that the Bitcoin users are around of 1 MIL. This is a very very small amount compared to the funds invested:)

Why would need a company like Bitpay to hire a lot of people? This is just an infatuate attitude. All the so called exchangers want to be seen as "Corporations"

It's funny sometimes when you see that millions of USD (from ventures, of course) are spent on nothing....like big and useless offices in the heart of financial cities. it's just gilding for fools.

Remember, 1 MIL users... not 10... but 1 MIL including China.  

[kamudimana]

eyyy, its just liar in bitcoin world that says the price doesnt matter
forget about my english, not my mother language

[Neg]

Bitcoin based companies may come and go and rise and fall but that's natural as it's a dog eat dog world out there, but let's remember the underlying technology behind bitcoin is still going strong so these layoffs are unfortunate but will happen from time to time as the industries grows and businesses find their footing.

[BitUsher]

The article looks like a paid press release from Ripple. Companies hire and fire employees all the time to meet market needs and expectations.

[MarketNeutral]

This isn't necessarily about the bitcoin exchange rate. It could be about any number of factors. For example, paying for over-priced, pseudo-prestigious real estate in the most congested and expensive part of Atlanta? What were they thinking? Also, BFL was their cash cow for a while, and now BFL is....well...uhh.....we don't need to reopen old wounds.

[Flashman]

Running a startup, I would seek to overhire by some amount, give everyone a fair shake, then keep the people that "get it" and let the others move on to something that more suits their enthusiasms.

[MarketNeutral]

Running a startup, I would seek to overhire by some amount, give everyone a fair shake, then keep the people that "get it" and let the others move on to something that more suits their enthusiasms.

This is actually a very common strategy.

[Elwar]

http://www.inc.com/adam-bluestein/obamacare-guide-2015-small-business.html
"After multiple delays, the Obamacare employer mandate will finally take effect on January 1, 2015."

Businesses that have 25 or fewer full-time equivalent employees, pay average annual wages below $50,000, and cover at least half of the premium cost for employee's health insurance can qualify for a tax credit of up to 50 percent of employer-paid premiums.

Blue Cross Blue Shield and other insurers have stopped allowing businesses to renew policies that aren't compliant with ObamaCare. In their place, they're offering plans with 14% to 45% rate increases

Kaiser Permanente already has sent cancellation letters to employers, explaining that their existing plans don't offer ObamaCare's richer benefits and therefore are no longer available

[BitUsher]

Running a startup, I would seek to overhire by some amount, give everyone a fair shake, then keep the people that "get it" and let the others move on to something that more suits their enthusiasms.

Exactly. It is a wise business decision to layoff at least 10% of the lowest performing or valuable employees a year.