8-year-old tech firm announces surprising layoffs

By TheStreet Roundtable

15 days ago

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Shutdowns, bankruptcies and layoffs continue to torment the crypto industry.

Now, one of blockchain's most technically revered companies has joined the list.

StarkWare, the Israeli company behind the Starknet Layer-2 network, has confirmed a downsizing as part of a significant strategic restructuring.

The announcement was made in a post on X on April 13.

What is StarkWare?

StarkWare Industries was founded in 2018 by Eli Ben-Sasson, his former PhD student Michael Riabzev, Uri Kolodny, and Alessandro Chiesa of UC Berkeley.

The company's roots run deep in cryptography. Ben-Sasson co-invented the STARK and FRI protocols, which together produce a form of zero-knowledge proof resistant to quantum computers and requiring no secret keys.

Before StarkWare, he was a founding scientist at Zcash (ZEC), a design for a private cryptocurrency based on zero-knowledge proofs. The same mathematical intuitions that underpinned Zcash's privacy model were later redirected toward scalability at StarkWare.

StarkWare develops two primary products:

StarkEx, a standalone permissioned Validity-Rollup, and
Starknet, a permissionless decentralized ZK-Rollup.

StarkEx launched on Ethereum (ETH) in June 2020 and has since been adopted by platforms including Sorare, dYdX, and Immutable X.

Starknet, launched in June 2021, is open to any developer. Its native token STRK is used for transaction fees, staking for network consensus, and governance voting. The entire system runs on Cairo, a custom programming language built by StarkWare engineers.

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A leaner team and 'tangible revenue'

In a post shared on X, Ben-Sasson outlined both a diagnosis and a direction. StarkWare, he wrote, has established itself as the technology leader in ZK-proof infrastructure, building Cairo, Sierra, and post-quantum proving systems.

But technology leadership, he argued, is no longer sufficient. The company is now pivoting from scaling many initiatives well to concentrating on a smaller number of high-value products that only its stack can deliver.

"It is now time to convert our technological superiority into tangible revenue and significant usage, with high emphasis on products that can be powered only by our technological moat. To execute this, we must change how StarkWare operates."

To do that, StarkWare is reorganising into two purpose-focused units, each led by a general manager, either Chief of Product Avihu Levy or Head of Product Tom Brand, with dedicated engineering, product, business development, and go-to-market functions.

The restructuring is accompanied by a workforce reduction.

"Very sadly, as part of this process, we are downsizing. Our new strategy requires that we move fast, and we’re too big and too inefficient for that. So, we are making a tough but responsible decision to become smaller and more flexible," Ben Sasson wrote.

Affected employees will receive individual meetings with management, and Ben-Sasson noted the company intends to go beyond legal obligations in supporting those departing.

TheStreet Roundtable reached out to StarkWare for a comment and had not received a response by the time of publication.

At press time, STRK token was trading at $0.03294, down 1%, while ZEC token had also dropped by 1% in the past 24 hours to trade at $360.97.