The year kicks off with massive layoffs and cuts in the industry
Volatility is constant in all aspects of the cryptocurrency sector. Aside from the roller-coasting prices, the availability of crypto and blockchain jobs is also inconstant and not in a good way.
Over 26,000 people lost jobs in the crypto landscape last year, the most significant number within 365 days. These job cuts have notably been carried over to 2023, with several top companies announcing layoffs in the first few weeks of January.
In January 2023 alone, the number of employees retrenched was about 41% of all layoffs recorded in the crypto space last year.
Here is a list of the most extensive layoffs of the year so far.
Coinbase, one of the largest cryptocurrency networks, has suffered vastly since the dawn of the crypto winter. Reports show that the network’s problems have continued into 2023, recently cutting about 20% of staff – about 950 persons.
Brian Armstrong, Coinbase’s CEO, sent a public announcement to its employees, explaining the platform’s reasons for making that decision. Armstrong began by mentioning how the 2022 downward market trend affected the crypto landscape but highlighted that they plan to ensure long-term operational efficiency.
Brian also noted the 25% reduction in operational costs as part of its annual operations plans in 2023. It is not the first time Coinbase laid off personnel. Last year, the network let go of 1100 employees, remaining with 4700.
As part of helping its former employees transition, the exchange will give them several benefits to streamline the process. People in the US will get a minimum of 14 weeks of base pay, health insurance, and more benefits. Additionally, people from other countries will get equal pay according to the employment regulations of their respective regions.
Another top network to record massive layoffs in 2023 is Blockchain.com. The crypto brokerage firm is letting go of about 28% of its workforce, announcing the release of about 110 employees in January 2023 alone. Last year, the company also let go of about 150 employees during the crypto industry turmoil.
In a recent statement, a Blockchain.com representative noted that the current crises in crypto led to the decision to cut operational costs and rightsize the company. Furthermore, its $270 million loss to 3AC contributed to its ongoing problems. The company promised to compensate the employees with severance packages depending on the country of their residence.
Silvergate Capital announced in January that they cut down around 200 employees, or 40% of the staff.
The banking network has been severely suffering in recent months, with their latest report announcing an outflow of $8.1 billion in the fourth quarter of 2022. The network had to sell $5.2 billion of debt security at a loss of $718 million.
The laying off of the 200 employees was done to cut the operational costs, especially after the network’s recent suffering. However, this move will cost Silvergate a total of $12 million in severance payments.
Crypto.com, a popular cryptocurrency exchange network, recently announced its decision to reduce its global workforce by 20%. Before the recent decrease, Crypto.com had an employee base of about 3500 to 4500 employees. As such, cutting down the staff by 20% means that the exchange is letting go between 700 to 900 employees.
An announcement on its blog noted that every other employee affected was informed of the decision. Several factors, including unforeseeable industry events and economic headwinds, triggered Crypto.com’s recent layoffs, according to the company.
NFT marketplace SuperRare’s CEO John Crain announced through Twitter the laying off of about 30% of its employee base.
According to sources, the marketplace had an estimate of about 70 employees initially, but the recent cut-offs reduced the number to 50.
According to Crain, the reason behind the retrenchments is over-hiring and aggressive growth. As such, the network decided to “rightsize” the team to ensure that the marketplace continued efficiently serving artists, collectors, and creators.
SuperRare’s top competitor OpenSea has also not been immune to the winters recently, cutting down its staff by 230 people last year.
Huobi, one of the largest cryptocurrency exchanges worldwide, also announced a headcount reduction of about 20%. The claims of layoffs surfaced earlier, but the exchange denied them at the time.
However, a Huobi spokesperson later confirmed that the exchange is laying off 20% of its staff. According to the spokesperson, Kate Li, Huobi will maintain a small team in the future.
Another network that recently reduced its workforce is Genesis. According to reports, the crypto lender laid off 30% (about 62 employees) of its staff. Further reports indicate that Genesis currently employs approximately 145 individuals. It is the second time the troubled lender has reduced its workforce in the past six months.
The layoffs are mainly because of the ties the lender has to the infamous Alameda Research. Most recent reports have suggested that the lender is already running bankrupt.
On Jan. 10, emerging reports noted that another blockchain network, ConsenSys, was planning to cut down its staff by about 100 people. Initially, the Ethereum (ETH)-focused software firm had 900 staff members.
The network later confirmed that they would be laying off 96 people, representing 11% of their initial workforce. The network aims at adjusting to uncertain and challenging market conditions.
ConsenSys announced some steps to support those impacted by the layoffs. They include generous severance packages, the extension of healthcare benefits, personalized support, and many more.
Fidelity-backed digital assets platform OSL recently announced a workforce reduction, although OSL did not specify the exact number of people laid off. The company made the first cut-offs of about 40 to 60 employees last year, which represented 15% of the workforce at the time.
Another network to recently record job cuts is a US-based cryptocurrency exchange Gemini. Gemini has suffered vastly over the past few months because of its ties to troubled Genesis. In January, the trading platform announced laying off about 10% of its staff.
Based on recent reports, Gemini had an employee count of just 1000 staff members in November, which means around 100 people have been let go.
Will the contagion continue?
As the crypto industry continues to take losses in 2023, many projects are already reducing operational costs. But despite the state of the market, Binance exchange, the largest crypto trading platform, seems to be hiring big. According to Linkedin, the exchange has 1,092 job openings.
Even as many top tech and crypto companies lay off employees, other startups are taking advantage and recruiting tech staff. These employers note that hiring during winter helps find people most passionate about the industry rather than looking to make quick money. Those ready to be employed during the “winter” are in the industry for the right reasons. Networks like Coinshift, Cocreate, Clearmatics, NPixel, Luther Tech, Sismo, and others have been advertising job vacancies.