Following the COVID pandemic and its impact on economic, political, and social life, last year saw the crypto and stock markets enjoy substantial growth. New companies and concepts emerged to join the ever-expanding industry. However, this year has been challenging, with rising inflation pressures and the possibility of a recession, and the World Bank suggested in a news release that global growth will slow through 2023. Prices have lately dropped to historic lows in the cryptocurrency market, and companies and individuals alike have reported significant losses and the liquidation of cryptocurrency wallets. Unquestionably, the crypto winter has arrived.
Various web3 companies have reacted to the current bear market in multiple ways. Recent events include withdrawal pauses, reduced workforces, recruitment halts, new project launches, company hiring, management changes and strategies to cut losses, and capital utilization to maintain stability.
Read Also: Best Five Crypto Whale Tracking Apps You Would Need
Here are some recent cryptocurrency company layoffs you should be aware of.
Argentinian crypto exchange, Buenbit’s announcement in May was the first real indicator of the coming series of layoffs that had crypto workers uncertain of their job continuity. The exchange announced its plan to a staggering 45% of its staff, a move that would cut off 80 of its 180 employees.
CEO, Federico Ogue wrote in a Twitter thread that the decision had nothing to do with what happened with UST/Terra, and writes that the company “plans to focus exclusively on operations in countries where we are present today and maintain a self-sustaining and efficient structure.”
Following the trend was another major company Bitso, a leading Latin American cryptocurrency exchange. Bitso laid off 80 workers in May, accounting for about 11% of its workforce, and stated in a statement:
"Our decisions about the people who work in our company are made based on our long-term business strategy and to support our customers and our strategy as a company."
The parent company of Latam’s biggest exchange, Mercado Bitcoin, 2TM dismissed 90 of its 750 employees. The company noted that this development was a result of “change in the global financial conditions”, and subsequently said that the dismissed employees would receive benefit packages to “support them personally and professionally.”
Rain CEO Joseph Dallago said in a statement:
“We have had to make tough decisions to be able to navigate through this period of uncertainty and we can confirm we have downsized our Rain workforce” as it gave the boot to dozens of its employees as a result of the extended downturn of crypto prices.
The Coinbase-backed middle eastern cryptocurrency exchange raised $6 million in January in a round of financing led by Middle Eastern venture capital firm MEVP Capital.
Twin founders of Gemini Trust Company, Tyler and Cameron Winklevoss revealed in a blog post at the beginning of June that the company was firing 10% of its staff to ensure that they are “right-sized for the current, turbulent market conditions that are likely to persist for some time.”
Popular exchange and FIFA World Cup sponsor, Crypto.com announced the laying off of 260 employees that make up 5% of its corporate workforce. This development was made public on a Twitter thread by CEO Kris Marszalek to give details about what Crypto.com is doing during the market turndown.
“We will continue to evaluate how to best optimize our resources to position ourselves as the strongest builders during the down cycle to become the biggest winners during the next bull run,” he added.
Leading cryptocurrency lending company, BlockFi also fired about 20% of its employees. Following the announcement via a blog post, CEO Zac Prince stated in a Twitter thread that the layoffs can be attributed to a "dramatic shift in macroeconomic conditions."
The firm grew from 150 employees at the end of 2020 to over 850 at the time of the layoffs, implying that approximately 170-200 people were removed from the company's payroll.
On June 14, Coinbase joined the plethora of firms giving their employees the marching order. The company announced the reduction of their team size by 18% on their blog as a measure to “stay healthy during this economic downturn”. Coinbase also noted that they “over-hired”, noting a 200% increase in its workforce since the beginning of 2021.
The company also decided that it will maintain its employment freeze due to recent volatility in the cryptocurrency and tech stock markets. In addition, certain job offers that had been accepted will be withdrawn by the company.
Crypto exchange base in the United Arab Emirates, BitOasis, also joined the layoff spree, removing 5% from its current employment owing to the “recession” and “market Toimoil, as stated by CEO and co-founder of BitOasis, Ola Doudin. He added that the company was expanding too quickly and had become "too comfortable" during the height of the crypto market boom.
A firm representative, on the other hand, said that the nine laid-off employees constitute less than 5% of the company's staff, which may be insignificant in comparison to other exchanges.
Bybit is the most recent company to join the bandwagon to lay off employees. The Singapore-based cryptocurrency exchange confirmed layoff rumors and announced that it was to lay off about 30% of 2000 workers. According to The Block, a representative confirmed that affected employees will receive severance pay and access to Bybit's employee career support services while transitioning jobs.
We appear to still be in deep water as a wave of layoffs sweeps across markets. Financial global leader JP Morgan Chase will lay off over 1000 employees, and real estate firms such as Compass and Redfin Corp plan to reduce their workforces by 10% (450 workers) and 6% (470 workers) respectively.
Experts have also warned that, after about ten years of market growth, we may see more lingering effects of the recession in the coming months, including additional layoffs. So brace yourself! This could be a long winter.
I/we have no positions in any asset mentioned, and no plans to initiate any positions for the next 7 days