Coinbase, Gemini and others cut jobs, rescind offers and suspend hiring as crypto winter hits hard

The crypto winter shows no signs of letting up. At first, the slowdown caused difficulties mainly for retail investors. However, crypto companies have also started to feel the chill over time, especially with the market showing no signs of improving. Besides the stutter in crypto prices, the tech sector also underperformed, which made things worse for these companies and forced them to take a step back on hiring.

Crypto exchanges have been particularly hard hit. Investors began to lose faith in the market, causing crypto trading volumes to decline and massive losses. With this in mind, crypto exchange Gemini published a blog post on June 2, 2022 announcing a 10% reduction in its workforce.

“We’ve asked team leaders to ensure they’re only focused on our mission-critical products and to assess whether their teams are the right size for the current and turbulent market conditions that are expected to persist for some time. After careful consideration and deliberation, we have made the difficult but necessary decision to part ways with approximately 10% of our workforce,” the post read.

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He also described the trajectory of the crypto industry as “a punctuated equilibrium – periods of equilibrium or stasis that are punctuated by dramatic moments of hypergrowth, followed by sharp contractions that settle at a new more stable equilibrium. higher than the previous one.

He added that geopolitical tensions and deteriorating macroeconomic situation were the causes of the crypto crisis. The only good news is that Gemini has promised severance pay and health care benefits for affected employees.

In the aftermath, Coinbase, the world’s largest crypto exchange, also published a blog post on June 3, 2022 announcing a hiring hiatus. The exchange had already suspended hiring two weeks prior to this announcement while it assessed the current situation and figured out a way forward. Workforce management was cited as the main area of ​​focus in reducing costs.

“In response to current market conditions and ongoing business prioritization efforts, we will be extending our hiring pause for new and replacement positions for the foreseeable future and canceling a number of accepted offers,” a read Human Resources Director LJ Brock’s Coinbase blog. Coinbase is also reeling from a loss of $430 million in the first quarter of 2022.

According to Coindesk, Argentinian crypto exchange Buenbit reduced its workforce by 45% on May 23, 2022. The exchange which employed around 200 people became a team of 100 after the layoffs. Brazilian crypto exchange 2TM and Latin American exchange Bitso also laid off 80 employees each.

In an email conversation with Coindesk, George Sutton, equity analyst at Craig Hallum, said: “It is natural that exchanges, which are currently experiencing declining volumes, are reducing. The beauty of this industry is that there are a plethora of disruptive models in the digital currency and blockchain space to happily hire all available talent. We view volume declines as temporary.

It may take some time for investors’ upset sentiment to correct, and markets don’t look ready to rally just yet. However, there is still a silver lining to every cloud. Nicholas Strange, founder of recruitment firm Crypto Talent, told Coindesk that crypto companies with use cases that solve real-world problems are most likely to survive this contraction phase. He added that all crypto organizations navigate a path of peaks and troughs. It only makes them better at managing their coffers.

Moreover, the slowdown has not affected all crypto exchanges and companies. FTX, the second largest cryptocurrency exchange, is going in the opposite direction. It has recently expanded into the stock trading space to diversify its business. And while others are looking to downsize, FTX is even looking to acquire an Indian gaming startup called Mobile Premier League (MPL). And FTX is not alone. The digital arm of Fidelity, the multinational financial services company, is counting on its double headcount this year to meet growing demand from institutional crypto investors.

First post: STI


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