New York: Crypto companies are once again tightening their belts, as the bear market enters the second year and the industry suffers from major meltdowns that damage its outlook.
Coinbase Global, Blockchain.com, and Genesis are among companies embarking on a new round of layoffs. The three firms, along with Huobi exchange, crypto bank Silvergate Capital, Ethereum software firm ConsenSys, collectively are shredding more than 1,600 jobs in the first two weeks of 2023. In a letter to employees, Coinbase CEO Brian Armstrong said the industry could see further contagion, and that “in hindsight,” he should have cut deeper last year.
The crypto industry has already downsized from its boom time in 2021, when upstarts poached talent en masse from Silicon Valley and Wall Street firms. Within a year, some of the biggest participants - FTX, BlockFi, Celsius Network - went bankrupt and others scaled back ambitions to survive.
The new round of dismissals came as a possible US recession looms, leading to job cuts across industries. Tech and financial titans such as Amazon.com, Goldman Sachs Group and BlackRock are also conducting widespread layoffs, citing economic uncertainty in a higher interest rate environment.
Further upheavals could come as crypto brokerage Genesis and its parent firm Digital Currency Group seek to resolve their debt woes with Gemini crypto exchange and other creditors.
Here are some of the crypto job cuts in 2023:
Crypto platform Blockchain.com is letting go of 28 per cent of its workforce, or about 110 employees, according to a person familiar with the situation. The job cuts followed its reduction of about 150 staff last year. After the layoffs, the company’s headcount will be 280 employees, up from 160 at the beginning of 2021, the person said. The news was first reported by CoinDesk.
On January 10, Coinbase announced a job cut of about 950 employees, or 20 per cent of its workforce. It’s closing most of its operations in Japan and shutting several projects. Last June, Coinbase laid off 18 per cent of its workforce, the equivalent of roughly 1,100 employees, and eliminated another 60 in November.
Ethereum software company ConsenSys plans to cut off more than 100 employees, CoinDesk reported.
Crypto brokerage Genesis Global Trading Inc. laid off more than 60 employees, or about 30 per cent of its workforce, on January 5. Last August, the company eliminated 20 per cent of its workforce, while its CEO Michael Moro stepped down.
Crypto exchange Huobi is planning to lay off 20 per cent of its workforce, according to a January report. The company has about 1,100 employees.
Silvergate Capital Corp. said in January it is reducing headcount by about 200, affecting 40 per cent of its staff. The crypto-friendly bank suffered a run on deposits, prompting it to sell assets at a steep loss.