It has been reported that Crypto.com, the third-largest company in the cryptocurrency industry by headcount, has announced that it will be laying off 20% of its staff. This news follows a trend of similar announcements made by other companies in the industry this year, as they struggle to navigate the ongoing economic headwinds and unforeseeable events that have negatively impacted the industry.
In a blog post, Crypto.com co-founder and CEO Kris Marszalek explained that the company had grown ambitiously at the start of 2022, aligning with the trajectory of the broader industry. However, that trajectory changed rapidly with a confluence of negative economic developments, leading to the decision to reduce the company’s workforce.
It is estimated that following Friday’s cuts, Crypto.com now employs between 3,600 and 4,500 employees. This is a significant reduction from last year, when the company announced a layoff of 5% of staff, or 260 workers, in June. Additionally, another round of layoffs from July through October at the company was reported to have included an additional 2,000 employees.
The cryptocurrency industry has been hit hard by shrinking investor appetite for risky assets, which led to a plunge in cryptocurrency prices last year. This has resulted in the collapse of some heavily leveraged investors, and the impacts continue to ripple through the industry in the form of layoffs and bankruptcies.
In announcing Friday’s staff cuts, Marszalek specifically noted the collapse of FTX, which “significantly damaged trust in the industry.” This is a sentiment that is echoed by other companies in the industry, who have also had to make difficult decisions to reduce their workforce in order to stay afloat.
According to Yahoo Finance’s tally, already crypto firms have let go of more than 2,600 workers in the first two weeks of 2023. This includes layoffs made by Blockchain.com, which totaled 28% of its workforce, or 110 employees worldwide. Other companies that have announced layoffs include Consensys (at least 10% of its team, or 100 employees), Coinbase (20% of its team, or 950 employees), Huobi (20% of its team, or 200 employees), Genesis (30% of its team, or an estimated 60 employees), Silvergate (40% of staff, or 200 employees), and NFT platform SuperRare (30% of staff, or an estimated 27 employees).
These layoffs add to the at least 9,500 workers let go by firms of the once buzzy — and now capital constrained — sector, according to an annual report from The Block Research. Despite this, the industry’s largest player, Binance, which has not announced layoffs since cryptocurrencies started to plunge last May, is planning to scale its workforce by as much as 30% in 2023, according to CEO Changpeng Zhao. This is a positive sign for the industry, and suggests that some companies are still optimistic about the future.
