In comparison, since November 2021, the total market capitalization of the digital asset industry has increased. fell sharply from its all-time high of $3 trillion to its current level of ca. 1.27 trillion dollars, which demonstrates a loss ratio of more than 55%.
While this massive decline in the money supply can be attributed to a number of factors, including the ongoing Russian-Ukrainian war, rising inflation and deteriorating macroeconomic conditions have had a major impact on the cryptocurrency job market.
For example, earlier this month Gemini, a cryptocurrency exchange led by the Winklevoss twins, announced that the bear market forced them to lay off almost 10% of their employees. The brothers noted that as part of their first major layoff, Gemini had to shift its focus to products that are “critical” to the firm’s long-term vision and goals. In fact, the brothers acknowledged that the existing unrest is likely to continue for at least a few months, adding:
There is no denying the fact that the crypto industry has grown from strength to strength over the past couple of years. However, the past six-plus months have been anything but pleasant for the market.
“This is where we are right now, in a contraction phase that is transitioning into a period of stasis — what our industry is calling “crypto winter.” […] All this is exacerbated by the current macroeconomic and geopolitical turmoil. We are not alone.”
How bad is the situation really?
In addition to Gemini, a number of other high-profile firms have had to make serious cuts in recent months. For example, the second largest cryptocurrency exchange in Latin America, Bitso, announced late last month that it was laying off 80 of its employees due to deteriorating global economic conditions. At the time of the announcement, Bitso had over 700 full-time employees.
Overhauling the firm’s staff is not only a way to cut the budget, but also a way to restructure Bitso’s day-to-day operations. However, a spokesperson for the exchange recently revealed that they still have few job openings in niche strategic areas such as accounting, taxation, fraud detection, and others.
Buenbit, one of Argentina’s leading cryptocurrency investment platforms, has had to take more drastic measures to stop its financial bleeding. In the last week of May, the company laid off approximately 45% of its workforce, cutting its active workforce from 180 to 100.
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2TM, the parent company of Mercado Bitcoin, also said it was about to lay off 12% of its 750-person team as a result of “changes in the global financial landscape.” At press time, Mercado Bitcoin is by far the largest crypto exchange in Latin America in terms of total trading volume. As part of the relocation application, a 2TM representative noted:
“The scenario calls for adjustments that go beyond cuts in operating costs, which makes it necessary to cut some of our workforce as well.”
Coinbase announced he recently said he would slow down recruitment and review his financial strategies to ensure the company’s continued success. firm even canceled the many job offers he had already made, jeopardizing the visas of many foreign candidates. Without addressing the visa issue directly, Coinbase HR Director LJ Brock wrote recently on the blog:
“As these discussions have evolved, it has become clear that we need to take stricter measures to slow our headcount growth. Rapid adaptation and immediate action will help us successfully navigate this macro environment and become even stronger, ensuring continued healthy growth and innovation.”
Cryptocurrency trading platform Robinhood laid off 9% of its workforce in April, the decision coming at a time when the company’s share offering hit an all-time low. Finally, one of the most famous crypto trading ecosystems in the Middle East, Rain Financial, fired more than 12 employees earlier this month, citing the global financial downturn as the reason for the same.
The aforementioned labor market turmoil seems to evoke an eerie feeling that reflects the events of 2018, when the market faced massive layoffs across the board. At that time, cryptocurrency mining giant Bitmain got rid of a huge part of its employee base, and reports at the time said that the company laid off 1,700 of its 3,200 employees, including the entire Bitcoin Cash (BCH) development team, several engineers, media managers. and more.
Renowned cryptocurrency exchange Huobi also carried out massive layoffs in 2018 when the company fired its “underperforming employees” while emphasizing that the remedial measures were necessary for “its core business” to support itself. The company reportedly employed over a thousand employees at the time.
Finally, in 2018, blockchain software company ConsenSys was also forced to make significant cuts as the company’s CEO Joseph Lubin wrote a letter to his employees saying he would have to lay off about 600 employees to help the business stay. afloat. .
Not everything is lost
In these unfavorable market conditions, there are still firms that have decided not to lay off their employees. For example, crypto exchange platform FTX has announced that it will not only retain its existing employees, but will also be hiring new staff as the crypto winter approaches.
As part of a recent Twitter exchange, CEO Sam Bankman-Fried explained that his firm will continue to expand because its growth plan was well structured, unlike some other firms that experienced unwarranted, unsustainable “overgrowth” during last year’s bull run.
1) Zigzag and hire:
why FTX will continue to grow as others cut jobs
— SBF (@SBF_FTX) June 6, 2022
Criticizing “hyper-growth companies”, Bankman-Fried said that quickly hiring more employees does not necessarily lead to significant increases in productivity, since rapid expansion more often than not makes it difficult for everyone to stay on the same wavelength. “Sometimes the more you hire, the less you make,” he said.
While FTX slowed recruitment earlier this year, the move, he said, was not due to a lack of funds, but rather a means of ensuring that new team members have enough time to adjust to their new roles and professional backgrounds. environment. .
Some crypto recruiters noted that while layoffs have indeed occurred in the digital asset industry, the hiring rate remains impressively high, especially when compared to the traditional tech space. By this point, a number of Silicon Valley giants, including Twitter, Uber and Amazon, announced there has been a major job cut recently.
Netflix also discontinued the role of 150 employees after posting historically poor growth numbers, while parent company Facebook Meta noted that it is suspending hiring for any middle and senior positions after it falls short of revenue targets.
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Neil Dundon, founder of employment agency Crypto Recruit, said things have not slowed down when it comes to hiring in the digital asset industry. “We have a team based around the world in the US, Asia Pacific and Europe regions, and demand is equally high across the region,” he noted in a recent interview with Cryptooshala.
Similarly, Kevin Gibson, founder of Proof of Search, told Cryptooshala that layoffs occurring in the tech sector have had little to no effect on his clients in the crypto industry so far, adding:
“I have only heard of two companies laying off people. This may change next month, but any gap will be immediately filled by well funded quality projects. As a candidate, you won’t notice any difference. if you lose your job, you will also have many offers pretty quickly.”
So as the ongoing downturn continues to heavily impact the global economy, it will be interesting to see how companies operating in this space can withstand the bearish pressure and weather the ongoing financial onslaught.
Credit : cointelegraph.com