Bear market: Some crypto firms cut jobs while others aim for sustainable growth

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To put things into perspective, the total market capitalization of the digital asset industry has almost fallen from its all-time high of $3 trillion to its current level since November 2021. $1.27 trillion, thus exhibiting a loss ratio of over 55%.

While this massive monetary slowdown can be attributed to a number of factors, including the ongoing Russo-Ukraine war, rising inflation figures and deteriorating macroeconomic conditions have had a major impact on the crypto job landscape.

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For example, earlier this month, Gemini, a cryptocurrency exchange run by the Winklevoss twins, announced that a bear market had forced them to lay off about 10% of their workforce. The brothers noted that as part of its first major headcount cut, 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 current unrest is likely to continue for at least a few months, saying:

There is no denying the fact that the crypto industry has grown from strength to strength over the years. However, the last six months have been nothing but pleasant for the market.

“This is where we are now, in a contraction phase that is settling into a period of stagnation – what our industry refers to as the ‘crypto winter. […] All this is further complicated by the current macroeconomic and geopolitical turmoil. we are not alone.”

How bad is the situation really?

In addition to Gemini, several other big-name firms have had to take serious cuts in recent months. For example, Bitso, the second largest cryptocurrency exchange in Latin America, announced late last month that it was laying off 80 of its employees due to the deteriorating global economic situation. At the time of the announcement, Bitso had over 700 full-time employees.

The firm’s staff overhaul is not only a means of tightening its purse strings, but also as a way of restructuring Bitso’s day-to-day activities. That said, a representative of the exchange recently revealed that they still have some vacancies in specific strategic domains such as accounting, tax, fraud detection and more.

One of Argentina’s leading cryptocurrency investment platforms, Bunabit, had to take more drastic measures to stem its financial bleeding. During the last week of May, the company laid off about 45% of its workforce, narrowing its active employee pool from about 180 to just 100 employees.

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2TM, the parent company behind Mercado Bitcoin, also revealed that it was going to lay off 12% of its 750-strong team as a result of “changes in the global financial landscape.” As of press time, Mercado Bitcoin is by far the largest crypto exchange in Latin America in terms of total trading volume. As part of a statement regarding the move, a 2TM spokesperson said:

“The scenario requires adjustments that go beyond the reduction of operating expenses, making it necessary to lay off part of our workforce as well.”

Coinbase recently announced that it would be slowing down its financial strategy hiring rate and re-evaluating its financial strategy to ensure the company’s continued success. The firm also turned down many job offers it had already issued, jeopardizing the visas of many international candidates. While not directly addressing the Visa issue, Coinbase Chief Public Officer LJ Brock wrote in a recent blog:

“As these discussions have developed, it has become clear that we need to take more drastic measures to slow growth in our workforce. Adapting rapidly and acting now will help us navigate this macro environment successfully and emerge even stronger, enabling further healthy growth and innovation. ,

Crypto-friendly trading platform Robinhood fired 9% of its employees in April, the decision comes at a time when the company’s stock offering touched an all-time low. Lastly, Rain Financial, one of the Middle East’s foremost crypto trading ecosystem, laid off over 12 employees earlier this month citing the global financial meltdown.

repeat of 2018

The above job turmoil makes it seem like a terrifying experience, reflecting the events of 2018 when the market suffered widespread layoffs across the board. At the time, crypto mining giant Bitmain laid off a large portion of its employee base, with reports suggesting the company laid off 1,700 of its 3,200 employees – including its entire Bitcoin Cash (BCH) development team, several engineers. , Media Manager included. even more.

migrant motherphoto by dorothea lange1936. This picture was a symbol of employment struggles during the Great Depression.

Major cryptocurrency exchange Huobi also saw massive layoffs in 2018, with the company letting go of its “underpowered employees” while emphasizing that remedial measures were necessary to maintain “its core business”. At that time, the company reportedly had a workforce of over a thousand employees.

Lastly, blockchain software technology firm ConsenSys was also forced to make significant cuts in 2018, after the company’s CEO, Joseph Lubin, wrote a letter to his employees revealing that they had to spend about 600 dollars in an effort to help keep the business afloat. Employees have to let go. ,

all is not lost

Amidst these unfavorable market conditions, there are still companies that have decided not to lay off their employees. For example, crypto exchange platform FTX announced that it will not only retain its existing staff but will also hire new personnel as the crypto winter approaches in March.

As part of a recent Twitter exchange, CEO Sam Bankman-Fried Explained That his firm will continue to expand its operations as its growth blueprint is well-structured, unlike some other firms that experienced unfounded, volatile “hyper-growth” during last year’s bull run.

Criticizing “hyper-growth companies”, Bankman-Fried stated that hiring more employees quickly does not necessarily lead to a substantial increase in productivity since rapid expansion is, more often than not, the same for all. It becomes more difficult to stay on the page. “Sometimes, the more you get hired, the less you work,” he said.

Even though FTX had slowed down their recruitment at the start of the year, they said the move was not due to a lack of funding, but rather a means of ensuring that new team members have access to their new roles and professional environment. I had enough time to adjust. ,

Some crypto recruiters noted that although the digital asset industry has indeed seen layoffs, its hiring rate has been excellent, especially when compared to the traditional tech space. To this point, several Silicon Valley giants, including Twitter, Uber and Amazon, have recently announced major job cuts.

Netflix also laid off 150 employee roles after posting historically poor growth figures, while Facebook’s parent company Meta noted that it was unable to meet any mid-to-end revenue targets. The recruitment freeze for senior level positions was setting in.

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Neil Dundon, founder of employment agency CryptoRecruit, said that things don’t slow down when it comes to hiring in the digital asset industry. “We have a team based globally in the Americas, Asia/Pacific and European regions and demand is equally high across the region,” he told Cointelegraph in a recent interview.

Similarly, Proof of Search founder Kevin Gibson told Cointelegraph that the layoffs in the tech sector have had little or no impact on his crypto industry clients so far, adding:

“I’ve only heard of two companies letting people go. This may change in the next month, but any shortfalls will be immediately taken up by well-funded quality projects. As a candidate, you make no difference.” You won’t see. If you lose your job, you’ll have too many offers very quickly.”

So, as the ongoing slowdown is impacting the global economy in a big way, it will be interesting to see how the companies operating in this sector are able to overcome the pressure of recession and survive the ongoing financial onslaught.