The crypto market continues its decline since its all-time high levels in November 2021. For the first time in 1.5 years, the market capitalisation of the entire cryptocurrency market dipped below $1trillion. Could this signal the beginning of a crypto winter?
In such bearish market conditions, it is no wonder crypto companies have to adapt. Combined with a global recession in sight, the following 4 crypto companies announced layoffs and hiring freezes.
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Coinbase freezes hiring and drops new hires
On June 2, Coinbase released a statement on its hiring plans. Close to 300 incoming employees, who already signed contracts, were suddenly dropped.
In light of this, a petition to remove the top executives Coinbase employees was met with harsh comments by CEO Brian Armstrong.
Coinbase debuted on the public stock exchange in April 2021 and remains one of the biggest exchanges. However, in the last few months, it faced pressure from losing customers and unprofitable quarters. The company reported losing close to half a billion dollars in the first quarter of 2022.
Despite its unpopular move to freeze hiring and rescind hires, the company set up a site for the affected individuals to find other opportunities.
Gemini lays off 10% of employees
Another big crypto exchange, Gemini, announced its 10% layoff. The exchange was founded by the Winklevoss twins, who are known for being involved in Facebook’s early days.
This is where we are now, in the contraction phase that is settling into a period of stasis — what our industry refers to as “crypto winter.”
Cameron & Tyler Winklevoss, in their layoff announcement
They further cited the shaky condition of the macroeconomic and geopolitical situation as a reason for their decision.
Crypto.com reduces workforce by 5%
Citing the market downturn, Crypto.com decided to lay off 260 employees, about 5% of its workforce.
The Singapore-based crypto company recently hit its 50 million users milestone. To promote crypto adoption, Crypto.com famously spent US$700 million for the naming rights of a baseball stadium in Los Angeles.
BlockFi downsizes by 20%
On June 13, BlockFi’s CEO broke the news that they are laying off approximately 20% of their staff. Out of the four companies, this was the highest fraction of employees.
In addition to the layoffs, BlockFI also plans to cut back spending by “reducing marketing spend” and “reducing executive compensation for myself, Flori and other execs”.
Conclusion
Perhaps crypto winter is finally upon us. Considering the inevitable economic downturn, the management of these companies has chosen such measures. Are they enough or are they overkill? Only time will tell. For now, we can only brace ourselves for more bad news in the months to come.
