Crypto companies cut down workforce as market drops

Platforms slash jobs 'by the thousands' amid fear of 'further collapse'

Crypto companies cut down workforce as market drops

Cryptocurrency outfits have begun to decrease their workforces, trimming down thousands of jobs to survive a downturn in the crypto market and the broader economy.

Coinbase, the largest cryptocurrency exchange in the United States (US), which had initially planned to hire up to 2000 more employees in 2022, laid off 18% of its workforce and declared a hiring freeze as the market crashed.

Brian Armstrong, Coinbase CEO, pointed out in a company-wide email to employees that the mass layoff is due to the possible recession looming and growth that happened all “too quickly.”

“I realise that removal of access will feel sudden and unexpected, and this is not the experience I wanted for you,” Armstrong said in the email.

For Hao Jia, one of the employees who received an email from Coinbase revoking their job offers, the loss of work also meant the risk of losing his visa. 

“Now, after Coinbase, I prefer to go to a bigger company because I worry about my visa,” Jia, who once passed down a job at a large technology firm to accept the offer as a software engineer in Coinbase, told CNN Business.

Similar fate among crypto exchanges

The sudden events at Coinbase reflect a broader trend in the crypto sector amidst recession fears inside and outside the industry.

Crypto.com CEO Kris Marszalek posted on his Twitter account that the Singapore-based exchange will lay off around 260 workers or 5% of its corporate workforce to ensure sustainable and continued growth for the long term.

“The markets will turn, and when they do, you can be sure that we will be ready to drive and capture the next wave of growth for cryptocurrency adoption,” he said.

Meanwhile, the Winklevoss brothers, the founders of the large exchange platform Gemini Exchange, said that they decided to reduce approximately 10% of their workforce to address the “current, turbulent market conditions that are likely to persist for some time.”

CNN Business further reported that the crypto lending platform BlockFi CEO also announced that the company would reduce roughly 20% of its staff given the impact of the “dramatic shift in macroeconomic conditions,” which negatively impacted the lending platform’s growth rate.

Obvious trajectory

Over the years, there have been previous significant recessions in the crypto market, including the 2018 Bitcoin crash and a drop in May 2021 that wiped out $1trn in market value in a week.

Data from nine.com.au showed that Bitcoin plunged to just above $20,000 on June 15, down from a record high of approximately $69,000 in November 2020.

Armstrong said that after a 10-plus year economic boom, the persistent decline in the market likely suggests that the crypto will enter a recession, which could lead to “another crypto winter, and could last for an extended period.”

Meanwhile, the Winklevoss brothers said that these difficult times are a forcing function for focus, and constraint is nothing but a mother of innovation.

“The crypto revolution is well underway, and its impact will continue to be profound. But its trajectory has been anything but gradual or predictable,” they said.

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