A downturn in cryptocurrency markets has prompted several companies to announce layoffs in recent days, leaving thousands of employees out of work.
Citing a “dramatic change in macroeconomic conditions around the world,” lending platform BlockFi announced on June 13 that it would cut its 850-member workforce by around 20%, affecting some 200 employees. Singapore-based crypto exchange Crypto.com has also announced that it will lay off one percent of its employees, or about 260 employees. And Coinbase, the largest US-based crypto exchange, announced today that it will be laying off around 1,100 employees, reducing its workforce by around 18%. Crypto exchange Gemini, which is run by the Winklevoss twins, also recently announced a 10% workforce reduction, affecting around 100 employees.
The layoffs were triggered by a market downturn dubbed by some as a new “crypto winter,” which has tested growth prospects in the once high-flying industry. Companies that had announced hiring earlier in the year are now rapidly moderating those plans.
What affects crypto layoffs?
The value of cryptocurrencies has fallen precipitously since November last year, when the market was valued at $3 trillion. Since then, the price of bitcoin has more than halved, as has the value of ethereum, another popular cryptocurrency.
The current crash began about a month ago, when the value of the USD-pegged Terra and LUNA stablecoins plummeted and wiped $400 billion off the crypto market capitalization.
This volatility, coupled with a slowdown in the public stock market triggered by the Federal Reserve’s efforts to control inflation, prompted a number of cryptocurrency companies to slow down their operations. On June 12, one of the biggest crypto lenders, Celsius Network, announced that it would freeze all withdrawals, trades, and transfers between accounts to protect its assets. Although cryptocurrency firms doubled their hiring from November to April, according to data from staffing firm ManPowerGroup, that pace has slowed in the past month.
Crypto has seen similar downturns before
So far, crypto exchanges appear to be the most affected by the layoffs as fewer retail traders have taken to their platforms.
This is not the first time the cryptocurrency industry has seen a wave of layoffs. A distinct market downturn in 2018, the first crypto winter, led cryptocurrency firms to make deep staff cuts.
A flurry of venture capital activity may continue to fund opportunities for job seekers interested in crypto, and other companies, such as crypto exchange FTX, have said they will continue to hire people. workers. In a tweet, FTX CEO Sam Bankman-Fried criticized “hyper-growth” companies, saying hiring sprees can hamper productivity. As recently as February, Coinbase planned to hire up to 2,000 employees this year.
How these companies are handling the downturn is likely to come under scrutiny from current and future employees. Coinbase CEO Brian Armstrong has drawn attention for telling disgruntled employees to quit in response to a workers’ petition that was circulated days before today’s job cuts. The company canceled more than 300 job openings last week, leaving some vulnerable hires in limbo.
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Crypto Exchanges Lay Off Thousands Of Employees Amid Cryptocurrency Collapse
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