XY – The Persistent Company, a San Diego-based startup developing Bluetooth beacons on a blockchain network, cut more than 40 employees last week.
In a blog post, Co-Founder and Chief Marketing Office Scott Scheper wrote that the company had cut more than half of its staff in order to focus its efforts. XY had 80 employees working on more than seven major initiatives, he wrote, which would hurt the company in the long run.
“Around 9:30 a.m. PDT this morning, we went through the excruciating process of downsizing our company by about a half,” he wrote. “We need to put ourselves in the best position for success. And that means making hard decisions. And that is what we did this morning.”
According to XY’s annual filing with the Securities and Exchange Commission, the company had 85 full-time employees as of March 30. The majority of hires were made recently, after XY pivoted from selling Bluetooth beacons that could be used to track items, to using blockchain technology to verify the location of those items.
Now, the company is focusing on building consumer-facing apps, that can allow users to earn XY’s cryptocurrency while they explore the world, according to Scheper’s blog post. And it still has ambitions to take its technology to space by launching low-earth satellites, a project the company announced shortly after hosting its first conference in November at the InterContinental San Diego.
Last year, XY reported revenues of $21.6 million, largely from sales of XY tokens, an Ethereum-based cryptocurrency, according to the SEC filing. Roughly $15.9 million of its revenue was from the sale of XY tokens, and the company raised an additional $6 million through a Regulation A+ offering, which allows unaccredited investors to purchase stakes in the company.
Selling and marketing represented the majority of the company’s expenses, totaling $13.7 million. The company also spent another $6.66 million in general and administrative expenses, and reported a total net loss of $2.5 million in 2018.