The crypto community has not had a unified response in dealing with the current bearish cycle, characterized by Terra’s collapse a month ago, the loss of critical price support levels among most cryptocurrencies and the fallout from the Celsius Network’s potential bankruptcy and Three Arrows Capital’s insolvency.
Some crypto firms were caught off guard by the increased risk arising from the carnage in the ecosystem, while other companies have been preparing for this moment to build.
One metric that illustrates how prepared crypto firms were to weather the turbulence is the number of job layoffs and openings.
On one side, a group of crypto firms has significantly downsized its workforce. After freezing its hiring process and rescinding job offers, Coinbase laid off 1,100 employees. Crypto.com let go of 260 people, Gemini cut its workforce by roughly 100 people and BlockFi reduced the number of its employees by 170 individuals. Moreover, Bitso, Buenbit and Mercado Bitcoin – major cryptocurrency exchange platforms based outside the U.S. – each laid off 80 people from their respective companies.
The mass layoffs not only demonstrate how some giants in the crypto space are not bulletproof and susceptible to large market changes, but also practiced irresponsible behavior in terms of not having enough funds on the runway to keep promises to their staffs during the bear market.
According to the U.S. Bureau of Labor Statistics, the unemployment rate in the U.S. sits at 3.6% as of May 2022, and yet the number of large companies downsizing highlights the growing rumors concerning an incoming recession. On June 14, Coinbase’s CEO Brian Armstrong said in a note shared with all Coinbase employees, “We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period.”
Despite mass layoffs by major players, there are companies that are hiring and even accelerating their hiring process.
Crypto companies looking to accelerate hiring showcases the different responses organizations have to the bear market. While there are some crypto firms that admitted to growing too fast in a way that was unsustainable in a turbulent market, others are increasing the amount of talent within their organization to better position themself in an environment where black swans exist.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.