In a blogpost, Kik CEO Ted Livingston said that around 100 employees will be affected by job cuts as the company’s workforce is reduced to just 19 team members.
On Tuesday (24 September), Kik Messenger founder Ted Livingston announced plans to wind down his messaging service and shift focus to Kik Interactive’s cryptocurrency, Kin.
More than 100 employees will be cut from the company, as the team is reduced to just 19 employees.
Kin, which launched two years ago, is currently the target of a lawsuit filed by the US Securities and Exchange Commission (SEC), which claims that its $100m ICO was illegal.
According to TechCrunch, the core issue in the lawsuit is the question of whether or not Kin is a security. TechCunch wrote: “The SEC alleges that it is and that the token sale violated securities laws. Kik Interactive denies Kin is a security.”
The SEC also said that Kik management predicted the company’s messaging app would run out of money by 2017.
‘No matter what happens to Kik, Kin is here to stay’
– TED LIVINGSTON
In a blogpost, Livingston wrote: “After 18 months working with the SEC the only choice they gave us was to either label Kin a security or fight them in court.
“Becoming a security would kill the usability of any cryptocurrency and set a dangerous precedent for the industry. So with the SEC working to characterise almost all cryptocurrencies as securities, we made the decision to step forward and fight.”
Livingston said that instead of selling Kin into liquidity, he has made the decision to focus resources “on the few thing that matter most”. He announced that the Kik messaging app would be shut down, the company’s headcount would be reduced to 19 and the sole focus of the business would be converting Kin users into Kin buyers.
“These are hard decisions. Kik is one of the largest apps in the US. It has industry leading engagement and is growing again. Over 100 employees and their families will be impacted. People who have poured their hearts and souls into Kik and Kin for over a decade.”
According to Livingston, these changes will drop the company’s burn rate by 85pc, putting it in a position to go through the SEC trial with its existing resources.
He added: “No matter what happens to Kik, Kin is here to stay.”