Nearly 5 000 crypto employees have lost their jobs since April, reflecting the crushing $1.9 trillion (R32 trillion-plus) loss in the market value of cryptocurrencies since the peak in November 2021.
Data from CryptoPresales.com shows June was the most brutal month, accounting for more than 60% of the job cuts. This coincided with the brutal sell-off in cryptocurrencies in June.
Data from Layoffs.fyi shows the San Francisco-based Coinbase made the biggest job cuts in the crypto market this year.
In June, the company announced it was laying off 1 100 people, or almost a fifth of its workforce amid a collapse in its stock and crypto prices.
The job cuts came after Coinbase, which gets most of its top line from transaction fees, reported a slump in users and a 27% year-on-year revenue drop.
“Later that month, the Singapore-based crypto exchange Bybit joined the list of companies cutting staff, with the second-largest layoff this year. The company cut off a whopping 30% of its 2 000 people workforce,” says Crypto Presales.
Massive layoffs in June continued with the crypto exchange Huobi Global. Even before the crypto market crash, Huobi reported a sharp drop in revenue caused by China’s decision to ban crypto trading last year. As a result of the cost-cutting measures, the company laid off around 300 people or 30% of its workforce.
Cryptocurrency exchange Crypto.com followed with 260 reported job cuts. In June, the company let go 5% of its workforce due to the downturn in the crypto market. However, layoffs didn’t end there. The company has quietly let go more employees since the initial layoffs, making it difficult to estimate their exact number.
CoinDesk, which monitors crypto layoffs, reports several other companies laying off 15-20% of their workforce, among them Genesis, broker Robinhood, Blockchain.com (25% reduction), NFC marketplace OpenSea (20%), Ignite, the company that founded the Cosmos blockchain ecosystem (more than 50%), and crypto exchange CoinFLEX (50%).
Writing in Fortune magazine, CEO of Coinchange, Maxim Galash, observes that crypto companies like his over-hired during the bull market and are now having to scale back fast.
“Now that the air is coming out of the market, they need to cut staffing costs urgently to stay afloat and weather a downturn that could be intensified by the worsening economic outlook. In other words, hire slow, fire fast. Layoffs are painful, but we do what must be done to sustain and grow the business: prioritize long-term shareholder value over short-term pain,” he says.
Crypto layoffs in 2022
The good news is the layoffs are slowing and reverse when the market turns bullish.
Galash believes many of the retrenched workers may end up in other start-ups, given their ability to build things from the ground up.
Not all crypto streams are drying up, however.
One area relatively unaffected is Web3 applications which will embed the use of blockchain and personal ownership in a wide range of online experiences.
“For example, blockchain-based play-to-earn gaming is still going strong, drawing heavy interest from venture capital firms as it increasingly merges the worlds of video games and crypto,” says Galash.
Blockchain technology is also seeping into a broad range of other industries where former crypto employees could add value. Banks and fintech firms increasingly need employees with crypto experience and expertise for their digital asset initiatives.