What do mounting job layoffs mean for the crypto industry?
As crypto markets tank and payrolls are slashed, observers believe it might push the industry to prioritise real-world applications over speculative transactions.
The latest crypto crash has many companies slashing their payrolls, as observers wonder what a long downturn would mean for the industry moving forward.
On June 14, Coinbase, the largest US crypto exchange which went public last year, announced it was laying off 18 percent of its workforce – or about 1,100 full-time roles.
“We grew too quickly,” CEO Brian Armstrong said in a blog post last Tuesday. “It is now clear to me that we over-hired.”
Armstrong added that the company was planning “for the worst,” including the likelihood of a “crypto winter” that “could last for an extended period.”
Two weeks before the layoffs, the exchange announced it would be rescinding job offers and pause hiring.
“Although I understand that difficult decisions have to be made by companies during these exceptionally challenging economic downturns, the bitter pill doesn’t get any easier to swallow,” Brett Murtagh, former executive assistant at Coinbase, shared on LinkedIn.
The newly laid-off Coinbase employees have joined the rapidly growing ranks of crypto’s recently unemployed. Last week, the CEO of Singapore-based Crypto.com, Kris Marszalek, slashed 5 percent of its workforce, or 260 people.
US exchange Gemini laid off nearly 10 percent of its employees. Latin America’s second-largest exchange, Bitso, announced late last month it was laying off 80 workers. BlockFi laid off 20 percent of its staff.
As recently laid-off talent took to social media to let the world know, multiple companies stood up to offer job interviews to those in distress like Binance, which offered two thousand jobs to replace those that were recently dissolved.
Binance’s CEO and president, Changpeng Zhao (or CZ), went on the say: “While lots of projects and exchanges are going to struggle through the bear market, many will come back stronger than before. Those that fail honestly, will start new projects and bring critical learnings from this experience. This is how an industry grow[s].”
As the crypto market cratered over the past week, several investment firms and exchanges are facing insolvency, and Bitcoin – the top cryptocurrency – saw a quarter of its value drop in a matter of days, while the second-biggest cryptocurrency, Ethereum, dropped by as much as 35 percent.
As larger economic forecasts remain sour with fears of a recession mounting, economist Peter Schiff wrote on Twitter that “this is likely just the first round of layoffs, and a harbinger of many more to come throughout the crypto ecosystem and beyond.”
The market is reeling from a combination of shocks: the latest US Federal Reserve interest rate hike saw investors move their money from riskier assets like crypto. Meanwhile, the Russia-Ukraine conflict has exacerbated global inflation woes, with rising energy and food prices.
Then in May, the Terra ecosystem and its algorithmic stablecoin UST collapsed, leading to a domino effect that recently saw crypto lender Celsius pause customer withdraws because of liquidity concerns which triggered further panic across the industry.
TRT World
“Although I understand that difficult decisions have to be made by companies during these exceptionally challenging economic downturns, the bitter pill doesn’t get any easier to swallow,” Brett Murtagh, former executive assistant at Coinbase, shared on LinkedIn.
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