Cryptocurrencies have been in the news lately due to the volatile prices of Bitcoin and other coins, along with numerous high-profile collapses such as FTX and Voyager. However, another story has been brewing beneath the surface – the massive layoffs in the cryptocurrency industry.
The result is a rapidly shrinking industry, with major exchanges and startups shutting down or laying off employees. Approximately 23,600 employees lost jobs in the crypto sector as of December 9 last year. This figure represents the industry’s highest number of layoffs ever recorded within a year.
The latest casualty is Singapore-based Crypto.com which has announced that it will reduce 20 percent of its global staff citing ongoing economic headwinds and unforeseen industry events. The crypto exchange conducted layoffs in June and August last year.
Leading US-based exchange Coinbase, is also shedding almost 950 jobs – around a quarter of its workforce.
The company, one of the few bright spots in the otherwise bearish crypto space in recent years, has been hit hard. News of the job cuts was revealed in a filing with the US Securities and Exchange Commission (SEC).
Coinbase stated that it expects its full-year figures to be “within the negative US$500 million loss– within the guardrail set out in a shareholder letter from earlier this year. The layoffs come as the firm struggles to achieve profitability and expects the cull to be completed by 2023. In addition, the move comes amid growing troubles and uncertainty in the cryptocurrency industry.
The list goes on and on
This is the latest in a string of recent crypto layoffs that have hit the industry. Ethereum software firm ConsenSys, which has an estimated 900 staffers, is planning to reduce its headcount by 100.
Founded by former Bitcoin developer and Ethereum co-founder Joseph Lubin, ConsenSys is one of the most well-funded blockchain startups, at US$7 billion, more than doubling its valuation since its US$200 million Series C raise in November 2021.
Meanwhile, NFT marketplace SuperRare has announced it is cutting 30 percent of its staff, with the remaining employees focusing on developing its technology platform.
CEO John Cain said on Twitter that “during the recent bull run, we grew in tandem with the market. “In recent months, it’s become clear that this aggressive growth was unsustainable: We overhired, and I take full ownership of this mistake.
Huobi and Genesis reducing headcount on the same day
Huobi and Genesis Global Trading were two companies that announced significant crypto layoffs on the same day.
Huobi has reduced its staff by 20 percent, which was denied by the company’s adviser Justin Sun. It was reported that employees were required to take their salaries in stablecoins, while on Twitter, there was a report of the closure of internal staff communication channels.
This is followed by news from Genesis Global Trading, which has laid off 30 percent of its staff, reducing its headcount by an estimated 62 employees. Genesis previously cut 20 percent of its workforce in August last year. The firm’s August layoffs came after filing a US$1.2 billion claim against failed crypto hedge fund Three Arrows Capital.
Silver Capital cut jobs after shares plunged
Crypto bank Silvergate shares plunged 46 percent after the company reported an US$8.1 billion withdrawal in the fourth quarter, and with that, 200 jobs were cut, which was about 40 percent of its workforce.
It was exploring the possibility of launching its digital currency. However, by the end of the year, the bank had halted its plans. The bank also wrote off US$196 million from its plans to acquire Diem from Facebook parent Meta Platforms (META).
Silvergate CEO Alan Lane said in a press release, said: “In response to the rapid changes in the digital asset industry during the fourth quarter, we took commensurate steps to ensure that we were maintaining cash liquidity to satisfy potential deposit outflows, and we currently maintain a cash position in excess of our digital asset-related deposits.”
Singapore crypto companies laying off employees
Singapore Amber Group, formerly Amber Technologies Limited revealed plans to lay off up to 400 employees at the end of 2022. The trading and lending platform for digital currency, scrapped performance-based bonuses for 2022 due to slower business growth and market uncertainties.
Amber which started with 1,100 staff, laid off about 400 of its workforces in early 2022. The company previously raised US$3 billion in funding in February 2022 and another US$50 million from a private funding round in December 2022.
Meanwhile, Bybit implemented a round of crypto layoffs of 250 employees (30 percent) as the bear market took its toll on the industry. It was reported in June of 2022, that Bybit silently let employees go citing unsustainable growth.
CEO Ben Zhou announced on Twitter that Bybit will implement another round of job cuts as it tries to refocus its operations amid a “deepening bear market.”
Cryptocurrency companies have been among the hardest hit by the financial turmoil of the past year. Thousands of people have been laid off, and expansion plans have been delayed or scrapped altogether.
Several problems, including regulatory uncertainty, a bearish market, and fraud, have plagued the industry. These issues have taken their toll on cryptocurrency companies, and many struggle to survive.
The industry is still dealing with the fallout from all of this, and it is unclear what the future holds. It remains to be seen how the current crop of cryptocurrency companies will weather the storm. Despite the challenges, many companies are optimistic about their future. With the right policies and regulations, the industry could rebound and reach new heights.