Cryptocurrencies and the stock market have been hammered by deteriorating economic conditions so far this year, between a recession potentially looming, sky-high inflation and a Federal Reserve that’s poised to further cool down the economy by raising interest rates.
The worsening outlook towards the economy has led companies to cut back on hiring or shrink operations in an attempt to better manage costs and protect profits. In early June, Tesla CEO Elon Musk said he has a “super bad feeling” about the economy in an email to company executives and stated 10% of salaried employees at the company would need to lose their jobs, according to reporting from Reuters.
The sense of pessimism has led to similar cuts among companies in the world of crypto, but not all, with some currently hiring and feasting amid the carnage.
Gemini Trust Co., owned by billionaires Tyler and Cameron Winklevoss, was among the first of crypto titans to announce it was firing employees. On June 2, the company said in a blog post it would be cutting approximately 10% of its workers, citing “turbulent market conditions that are likely to persist for some time.”
Coinbase, meanwhile, announced a hiring freeze that saw job offers rescinded from employees it had already reached agreements with. The company would later state the need to lay off 1,100 of its workers and prepare for an “extended” crypto winter, slashing its workforce by 18% because it “over-hired” during the previous bull run in crypto markets.
BlockFi CEO Zac Prince declared the company that offers its customers high-yield crypto accounts would be “reducing [its] headcount by roughly 20%” to around 600 on June 13 and said the “decision was driven by market conditions that have had a negative impact on our growth rate and a rigorous review of our strategic priorities.”
Crypto.com announced it would lay off 5% of its company or 260 members of its workforce to “ensure continued and sustainable growth for the long term,” CEO Kris Marszalek said in a Tweet on June 10. He added, “We will continue to evaluate how to best optimize our resources to position ourselves as the strongest builders during the down cycle to become the biggest winners during the next bull run.”
Within the past six months, Crypto.com has paid an estimated $1.4 billion in becoming a sponsor for the FIFA World Cup and putting its name on what was previously the Staples Center in Los Angeles, along with an additional $100 million for Matt Damon to star in Crypto.com’s Super Bowl commercial earlier this year, featuring the notable declaration, “Fortune favors the brave.”
2TM, the company that created Mercado Bitcoin, released a statement saying it would lay off 12% of its 750 workers the same week. The company that runs the second-largest cryptocurrency exchange in Latin America by volume, according to data from CoinGecko, based the decision on “changes in the global financial landscape” that required it to go beyond just the reduction of operating expenses.
Bisto, the largest cryptocurrency exchange by volume in Latin America, had revealed it was cutting 80 of its 700 employees the week prior amid a tightening economy. The company was founded in 2014 and operates in the U.S., Colombia, Mexico, Brazil, and Argentina. The exchange hosts 34 tradable currencies and claims to be the largest in Mexico.
Buenbit, a leading cryptocurrency exchange in Argentina, also said it needed to lay off 45% of its workforce around the same time, reducing its employee roster to 100 from 180. CEO Federico Ogue said in a Twitter thread, “After a 2021 of exponential growth for the tech industry, we find ourselves going through a global review stage.”
While momentum across markets is dragging down on some companies experiencing a hiring hangover, others are expanding and possibly scooping up talent that their competitors shed.
FTX has no plans to stop hiring new employees, Sam Bankman-Fried, the company’s CEO stated on June 6. The second-largest crypto exchange by volume behind Binance, according to data from CoinMarketCap, has approximately 250 employees.
“We’re going to keep pushing forward,” said Bankman-Fried in a Twitter thread. “Because we hired carefully, we can keep growing regardless of market conditions.”
Kraken said they have no intentions of making any layoffs and see the current market downturn as a “time to build,” the company stated in a blog post on June 15. It claims to not have adjusted its hiring plans and has 500 positions to fill throughout the remainder of this year.
In the statement, the company emphasized it is not guided by “short-term opportunities to maximize profit” and has learned how to navigate through tough times from experience with previous cycles, having been established back in 2011.
Binance CEO Changpeng Zhao said Binance is bulking up as its competitors try to skinny down, announcing that the company is hiring 2000 employees the same day Kraken also revealed a push to hire more.
“It was not easy saying no to Super bowl ads,” the CEO said in a Tweet, implying that to have ponied up for the potential visibility would have not been in the company’s best interest.
“If we are in a crypto winter, we will leverage that, we will use that to the max,” Changpeng Zhao reportedly said, according to Fortune, at the Consensus 2022 conference in Austin, Texas, adding Binance has a “healthy war chest.”
OpenSea announced it is “hiring across the board” on June 14 at the bottom of a blog post on its website revealing details regarding the release of its new Seaport, a Web3 protocol designed to facilitate the buying and selling of NFTs.
Everstake, a Ukrainian-based Web3 company, offers customers high-yield accounts on staked cryptocurrency and “continues to grow its team,” adding 30 employees since Russia’s invasion of Ukraine, Vlad Likhuta, the company’s head of growth told Decrypt in an email, also on June 14.
Polygon, the company known for its sidechain network that goes by the same name and allows for dapps to be scalably built on Ethereum, is growing as well, CEO Ryan Watt said in a Tweet on June 15, stating the company is striving to increase its headcount by around 15% by the end of this year.
The same day, Polygon’s Head of Remote Tyler Sellhorn asked people on Twitter who know individuals laid off from Coinbase and other Web3 companies to apply to Polygon, posting a link to the company’s job page in a subsequent Tweet.
Where from here?
Until cryptocurrency markets reverse their course, more companies could announce layoffs or even shutter entirely, and the downward trend in the prices of most digital assets could become exacerbated by a declining stock market or further economic turmoil.
However, some companies will take advantage of the opportunity and try to position themselves in hopes of capitalizing on the market’s recovery, whenever that may be.
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