Amid Crypto Market Crash, Some Firms Compelled To Slash Workforce, While Others Are Looking To Expand

The last two months have been excruciating for the crypto industry. As per CoinMarketCap data, the global market cap of cryptocurrencies has nosedived from $1.7 trillion at the start of May to $960 billion at the time of writing. That’s a 43 percent drop in less than two months, and very few coins, if any, have escaped the brunt of this meltdown.

Collapsing prices have knocked off millions of dollars from the holdings of institutional investors. However, not all firms have reacted to the crash in a similar manner. While some struggle to navigate the stormy seas, others are fighting headwinds and showing signs of growth.

Companies that have really felt the hit have been forced to reduce outgoings to sustain operations. Often, the only way to do this is through job slashes.

On June 13, 2022, crypto lending and trading platform BlockFi announced a 20 percent job cut. This means that 170-200 individuals of its 850-member workforce could get the axe in the coming weeks. BlockFi CEO Zac Prince tweeted that a “dramatic shift in macroeconomic conditions” was to blame for the unfortunate outcome.

That’s not all. On June 10, 2022, Kris Marszalek, CEO of Crypto.com announced in a series of tweets that the firm would be letting go of 5 percent of its workforce as well. “Our approach is to stay focused on executing against our roadmap and optimising for profitability as we do so,” he tweeted.

Last month, crypto biggies such as Coinbase, Gemini and Rain Financial announced layoffs, paused all hiring and rescinded existing job offers. Overwhelming 40-year high inflation levels coupled with diminished demand forced FinTechs to make severe job cuts. Fortune reported that the sector witnessed more job losses in May 2022 than the four previous months combined.

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In an official blog post, CEO and Co-Founder Brian Armstrong wrote that 18 percent of the Coinbase workforce would be unboarded, which translates to about 1,100 employees. The post also mentioned that the workforce grew 4x in the last 18 months, and sustaining such a high staffing cost was almost impossible.

However, not all crypto firms are sailing in the same boat. At the recent Consensus 2022 event, Binance CEO Changpen Zhao (popularly known as CZ in the crypto community) said the company had expansion plans. It would continue hiring and make new acquisitions to expand its footprint.

CZ explained that Binance had not engaged in heavy promotional activity and had, therefore, not incurred hefty expenses. “We have a very healthy war chest; we, in fact, are expanding hiring right now,” said CZ at the conference. “If we are in a crypto winter, we will leverage that; we will use that to the max,” he said, adding that the company is “kicking into high gear in terms of M&A activity.”

Mirroring the same sentiment, CZ tweeted recently that Binance is hiring for 2,000 open positions while most of its peer firms are trying to lose weight. “We will continue to grow our team as planned and see this moment in time as an opportunity to gain access to some of the industry’s best talent,” CZ told Coindesk.

Crypto exchange Kraken is also sailing at full throttle through the choppy crypto waters. “We have not adjusted our hiring plan, and we do not intend to make any layoffs. We have over 500 roles to fill during the remainder of the year, and believe bear markets are fantastic at weeding out the applicants chasing hype from the true believers in our mission,” the exchange wrote in its official blog post.

Interestingly, even Indian crypto firms are doing well through this period of distress. Mudita Chauhan, Head of HR at CoinDCX, told ETMarkets that the Indian unicorn is expecting a hiring growth in the current year. By the end of 2022, the exchange will double its workforce strength to 1,000 employees.

“We plan to build for scale and therefore, invest in functions that will strengthen our core. We will continue investing in resources for that,” she said.

Even WazirX, the largest crypto exchange in India, does not foresee any downsizing in the near future. In fact, it claimed that its employee strength grew by 6x in the last six months. Sricharan C, Head of HR at WazirX, told ETMarkets that the exchange was looking at aggressive hiring for its strategic roles.

Edul Patel, CEO and Co-founder of Mudrex, a crypto trading platform, believes that bear markets offer the best opportunities for innovation. “We are actively hiring, and there is no question of trimming. Bear markets weed out the noise and allow space for creativity and innovation,” he said to ETMarkets. “For us, it is a ‘build’ market and not a bear market,” he added.

Therefore, it is a market of contrast. While some firms seem to be suffering from the bitter crypto winter, others are shifting gears and looking to expand. Markets have also begun to look up over the last 24 hours, with most coins showing healthy gains since yesterday.

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