Article: Chaos in Crypto: Top companies announcing layoffs in 2023

Technology

Chaos in Crypto: Top companies announcing layoffs in 2023

Plunging deposits, layoffs, and lawsuits add to the turmoil of the crypto industry, which is still reeling from the market crash of 2022 and high-profile bankruptcies.
Chaos in Crypto: Top companies announcing layoffs in 2023

The crypto industry is facing a round of belt-tightening as the bear market enters its second year and major meltdowns continue to damage its outlook.

Leading companies such as Coinbase Global, Blockchain.com, and Genesis have announced layoffs in the first two weeks of 2023, in addition to other firms such as Huobi exchange, crypto bank Silvergate Capital, and Ethereum software firm ConsenSys. Crypto.com's co-founder has announced a new wave of staff layoffs today. 

Coinbase announced a job cut of about 950 employees, or 20% of its workforce, on January 10. In a letter to employees, CEO Brian Armstrong acknowledged that the crypto industry could see further contagion and that "in hindsight," the company should have cut deeper last year.  

“…I've made the difficult decision to reduce our operating expense (1) by about 25% Q/Q, which includes letting go of about 950 people (2). Brian wrote in a memo to its employees.

Blockchain.com, a leading cryptocurrency brokerage, has dealt a devastating blow to its workforce with the announcement of a massive 28% reduction, amounting to 110 employees, as reported by CoinDesk. This news adds to the growing list of job cuts in the struggling crypto industry this year, following a similar reduction of 150 staff last year.

Ethereum software company ConsenSys is reportedly laying off a significant number of its staff. The Ethereum studio based in New York City is planning to cut 100 or more employees from its current workforce of 900. The layoffs are said to be in the final stages, but the exact number is not yet confirmed.

Crypto exchange giant Huobi announced that it plans to lay off around 20% of its staff, in order to maintain a lean team in the current bear market, according to Reuters. The layoffs have not yet been implemented and the company stated that the decision is based on the current market conditions.

Silvergate, a crypto bank, announced on Thursday that it has cut 40% of its staff, or 200 employees, in response to the economic realities faced by the company and the overall cryptocurrency industry. The company stated that the decision was made to maintain its financial stability and adapt to the current market conditions.

The crypto industry, once a thriving ecosystem of new businesses and talented individuals, has undergone a significant downsizing following the market boom of 2021.

In a short period of time, several key players in the industry such as FTX, BlockFi and Celsius Network, were forced to shut down, while others were compelled to adjust their expectations and strategies to weather the economic downturn. 

The CEO of Crypto.com, Kris Marszalek, announced a new round of layoffs on Friday (January 13) that will decrease its global workforce by another 20%. The drastic scale-down of its global workforce despite the firm's robust footing with a base of more than 70 million users worldwide was attributed to its attempt to tide over the period of the crisis triggered by economic headwinds and tackle unforeseeable industry events.

“Several factors played into our decision to reduce headcount. While we continue to perform well, growing to more than 70 million users worldwide and maintaining a strong balance sheet,” Kris wrote in the company update.

Crypto chaos continues

The crypto industry continues to face turmoil as major companies announce layoffs and lawsuits are filed against crypto leaders for alleged fraud. 

Blockchain analytics firm Chainalysis reports a record high of $20.1 billion in illicit use of cryptocurrencies last year, despite a decrease in overall transaction volumes. 

As the industry navigates the delicate balance of protecting consumers and fostering innovation, stricter regulations may be on the horizon. 

US regulatory agencies have also issued a warning to banks about the potential dangers of the cryptocurrency market, including the possibility of fraud and misleading disclosures by digital asset firms.

In the early days of 2023, the job market has already taken a severe hit with over 30,000 layoffs reported in just the first week alone - a staggering figure that nearly doubles the total for all of December 2022.

The tech industry was hit particularly hard in 2022, with nearly a thousand companies worldwide shedding over 150,000 jobs, including major players like Amazon, Microsoft, Meta, Twitter, and Intel.

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Topics: Technology, #Layoffs

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