Parity Technologies recently announced laying off 30% of its staff. This roughly equates to 100 employees. There are two sides to this story: employees are claiming that Parity is trying to save itself from financial struggles, and the company is claiming that it is part of the process to streamline operations and focus on critical aspects.
No matter the reason, Polkadot’s native token DOT has been showing all possible signs of going down since the announcement. Reports claim that the price went to its lowest value since 2021.
Having said that, an essential question must be asked: how will the layoffs affect Polkadot’s future, assuming they will have any effect at all? In addition, the absence of Polkadot’s chief executive officer, Gavin Wood, has sparked suspicions that he may be behind the decision to lay off employees.
A Deep Dive into Polkadot Price Action
DOT is currently trading at $4.15; this is a slip of 4.28% in the last 24 hours. This could very well be because of the layoff announcement. Parity has, so far, justified its stance by saying that they are shifting the focus to blockchain and cryptocurrency services. Hence, the majority of the layoffs are in the marketing and business development departments. Developers are still working on network-building innovation for the ecosystem.
Björn Wagner, the Chief Executive Officer of Parity, has said that affected employees may continue contributing to Polkadot. There is a response to this from the other side, expressing how precisely it offers them relief.
A few days before the team’s annual retreat in Mallorca, everyone became aware of what had transpired. Employees who interacted with the media reported that the majority of them either broke down on stage or left earlier due to their dissatisfaction and concern about how it would impact them.
They also shed light on the fact that Gavin Wood was shockingly absent from the venue, or the entire retreat, for that matter. This has sparked doubts about his role behind 30% of employees coming at the risk of losing their livelihood.
In the past year, the bear market has caused the value of Polkadot’s DOT token to plummet. One perspective gaining traction is that Parity was on a hiring spree in the previous year when bearish trends were prevalent. That is a time when the company should have better managed the cost, said one employee, adding that they are now paying the price for that. DOT has not been doing well for the last 12 months, as evident from the fall of 36.56% at the time of articulating this piece.
Parity’s layoffs and the subsequent decline in Polkadot’s price raise concerns about the project’s future. Please visit our Polkadot price prediction page for a more in-depth analysis of Polkadot’s price.
Parity’s layoffs: A mirror to crypto industry’s volatility
To start with the matter at hand, Polkadot laying off its employees paints a negative picture for the entire community. At a basic level, it signifies how crypto ventures operate, irrespective of the department that is losing its members. It is difficult to conclude or state an opinion on the future of Polkadot, considering the volatility factor spreads over not just the native token but also the operations.
Nevertheless, it does showcase how the entire crypto industry functions. This is on top of the challenges it is facing at present. Most importantly, tokens like BTC and ETH are still looking to retain the growth they have begun achieving. BTC, for instance, is above the $30k mark at $34,117.36 at this time. ETH is at $1,794.48 at the same time.
Polkadot’s incident is a reflection of a macro environment, as Parity is not the only crypto firm that has laid off its employees. Polygon Labs, Circle, and Chainalysis have done the same. They show that the layoff at the blockchain intelligence firm has affected approximately 15% of the total staff, that is, 150 employees. Simply put, there is a high chance that crypto ventures are succumbing to the volatility factor of the industry despite beginning to experience bullish sentiments.
Implications for investors
Investors need to do their research before investing in Polkadot, any other cryptocurrency, or any other financial product, for that matter. As for Parity, investors could look to accumulate more units amid the fall in the price. This is relevant for those who run a longer race. Short-term gainers will evade the situation by avoiding diverting their funds since DOT has the potential to plummet more in the times to come.
An ideal suggestion is to consider the goals and amount of risk investors are willing to take instead of getting distracted by the outer picture shown by crypto ventures.
Polkadot’s price is volatile right now, and the reason could be the recent layoffs at Parity Technologies. They have suggested that Polkadot may be struggling financially. Insiders maintain the claim that it is a part of the process that they are shifting the focus to blockchain and crypto services.