Splinterlands gave us the sad news that they had to downsize by roughly 45% yesterday.
They also wanted to mention upfront they have no funds on FTX, nor are they affected by their crash indirectly, and that they have no debt or leveraged investments.
But the market conditions worsen and they needed to take action now, before it may have been too late:
@splinterlands/to-the-splinterlands-community
My thoughts are towards the people who were let go during these uncertain economic conditions and close to the end of the year. And we are not talking about a few people, they are a few dozen.
I don't know if there were any (blockchain?) devs let go, but if they were,
said on the CryptoManiacs Podcast they are hiring.
often mentioned he was looking for more devs too.
Was it necessary? Even without knowing the kind of runway Splinterlands still has, I believe it was. There were indications much earlier from the team that when they had built their runway, they didn't expect bitcoin to drop that low or to stay there for such a long time. And the FTX situation which crashed the market further, without prospects of recovery in the short term probably started to trigger some serious red flags about the length of the runway under these circumstances.
I wonder if that is a reason why so many presales were pushed in a very short time, since September. I still don't think that if more fiat could have been brought through them instead of recycling existing assets from Splinterlands, it would have been enough to prevent the downsize. Maybe postpone it for a short while. But not prevent it.
The team was simply too big for this deep crypto winter.
We continue to see that crypto businesses, no matter how solid they are, remain in their majority highly dependent on the cycles of crypto.
Splinterlands will more than likely recover from this. They may need to focus more, maybe change some deadlines, maybe their internal structure. I haven't listened to the Town Hall yet, so I don't know what else they revealed there.
If memory doesn't play me tricks, Splinterlands is not the first time going through a downsize. Of course, the number of people involved is much larger now. The idea is they know how to handle a situation like this and won't just wait until the last minute to run out of funds and be without options.
I know their core user base will be with them. And if some decide to sell out as a result of this event, there will be plenty to pick up the bargains, myself included.