Thank you and bye: five major crypto companies that have already laid off 2,200 employees in 2023

broker Blockchain.com said on January 12, 2023, that it will lay off 28% of its employees (about 110 people). In July, the company had already laid off about 150 people as it lost $270 million in loans it made to bankrupt hedge fund Three Arrows Capital (3AC).  This isn’t the first time Blockchain.com has sacrificed personnel. It also wasn’t the only major company to do so this year.

Why are companies making massive layoffs?

Back in February 2022, Vitalik Buterin, the founder of Ethereum, warned that the cryptocurrency market would soon begin to decline. And already in May, the cryptocurrency market dropped. 

Bitcoin (BTC), the first digital asset, fell below $16,000 in November, just one year after reaching a record high of $69,000. As of January 13, 2023, it is trading in the $18,000 range. The market capitalization of the cryptocurrency sector has fallen from $3 trillion to $900 billion. Digital asset owners and potential buyers have been spooked. Some rushed to sell their assets, while others stopped investing. 

In addition to the bear market, major crypto exchanges including Terra (LUNA), Celsius (CEL), Voyager, FTX, Alameda, 3AC, and BlockFi ceased to exist or filed for bankruptcy protection.

As of the end of 2022, many companies are resorting to various harsh measures in preparation for a prolonged crypto winter. Layoffs are one such move. CoinDesk wrote that as of December 5, more than 26,000 jobs had been cut (since April 2022) in the crypto industry.

Blockchain.com

The company, founded in 2011, claims that a third of the world’s bitcoin transactions are done through it. The platform has 83 million wallets and 37 million verified users, and it has produced more than $1 trillion in transactions since its launch. It operates in more than 200 countries. 

Last July, Blockchain.com had already laid off 25% of its staff, meaning it had cut about 150 positions at the firm. It is one of many companies that suffered from the collapse of the cryptocurrency hedge fund Three Arrows Capital in 2022.

Blockchain.com currently has 280 employees, up from 160 in early 2021. 

Crypto.com

Following that, Crypto.com also said on January 13 that it would cut its staff by 20%. This cryptocurrency exchange platform has more than 70 million users in more than 90 countries.

According to various social networks, Crypto.com has about 3,500-4,500 workers. Thus, 700 to 900 employees will be laid off.

Last October, Crypto.com had already laid off more than 2,000 employees, or 40% of its total workforce.

“The reductions we made last July positioned us to weather the macroeconomic downturn, but it did not account for the recent collapse of FTX, which significantly damaged trust in the industry. It’s for this reason, as we continue to focus on prudent financial management, we made the difficult but necessary decision to make additional reductions in order to position the company for long-term success,” the company said in its statement.

Despite this, over the last 7 days, the price of Crypto.com coin (CRO) has increased by 13.61%, and over the last day, by 2.46%. According to Coinbase, the current price of CRO is $0.06. This is 93.12% lower than the historical maximum of $0.97. And the number of active CRO addresses has dropped from 2,114 at the beginning of the year to about 640 this month.

Coinbase

Coinbase is an online platform for buying, selling, transferring, and storing cryptocurrency. It was founded in 2012. The company has over 108 million verified users in more than 100 countries.

On January 10, Coinbase announced it would cut 20% of its staff, or about 950 jobs. Thus, the team will be about 3,760. Coinbase had already laid off about 1,100 employees in June 2022, about 18% of its staff.

Sad news, I was impacted by the layoffs at Coinbase. Although it’s not an ideal situation, I’m trying to look at the positive. I was fortunate to be apart an amazing team and work on some awesome initiatives. I’m going to miss everyone. Onwards and upwards.

— Nick Slater ☻ (@slaterdesign) January 10, 2023

Nevertheless, Cathie Wood, founder of the investment company ARK Invest, has confidence in Coinbase. She believes the company will survive a bear market. Her ARK Innovation ETF (ARKK) investment fund bought more than 33,000 shares of COIN worth $1.45 million on January 10, followed by another 74,000 COIN worth $3.2 million on January 11.

Apparently, due to this, even amid the negative news about the layoffs, the company’s shares only went up. From about $43 to $47 for the current day. Last January, the stock traded at $230.

Genesis

Crypto lender Genesis has laid off 30% of its employees (60 employees), a company source told Reuters. The layoffs were first reported by The Wall Street Journal, which also reported that Genesis was considering filing for Chapter 11 bankruptcy.  Genesis had already laid off 20% of its employees in August last year. According to the source, the company now employs 145 people (previously it had 260).

Things are not going well for New York-based Genesis, which was launched in 2013. An analyst at The Block reported that the company has a hole of about $500 million in its budget because of the FTX collapse. Before that, it was hit by the bankruptcy of Three Arrows Capital (3AC) in early 2022. The company is threatened with bankruptcy.

The unpleasantness did not end there. On January 12, the U.S. government sued Gemini for selling unregistered securities to retail investors. It’s all about the Gemini Earn crypto lending program, which was suspended in November 2022 after Genesis said it no longer had liquid assets to withdraw. 

The complaint claims that the program was a series of investment contracts, not bank accounts, and should have been registered as securities. 

Huobi

Huobi is a leading cryptocurrency exchange with a strong presence in Asian markets. It was founded in 2013. According to the company’s website, Huobi is the first choice of more than 10 million users, and there are more than 200 regional service centers. 

Huobi will lay off 20% of its employees, according to a Mint report. Or 275 employees, according to layoffs.fyi.  The statement confirmed an earlier announcement by Tron founder Justin Sun about a restructuring at the company that will be completed by the end of the first quarter. According to Sun, the company now has 1,100 employees.

BREAKING: #Huobi confirms 20% layoffs, denies insolvency rumors

— whalechart.org (@WhaleChart) January 6, 2023

In June 2022, crypto journalist Colin Wu said Huobi could cut more than 30% of its workforce (about 300 workers).

EXCLUSIVE: Cryptocurrency exchange Huobi will start layoffs, which may exceed 30%. The main reason is the sharp drop in revenue after the removal of all Chinese users. Previously, Bybit also announced a layoff plan. pic.twitter.com/jbRG2Aew5G

— Wu Blockchain (@WuBlockchain) June 28, 2022

Research firm Nansen tweeted on January 6 that Huobi saw a “significant increase” in net outflows overnight. This is more than the entire previous week.

Meanwhile, the price of the Huobi Token (HT) fell from $6 to $5 in a month, according to CoinMarketCap. Today (January 13, 2023) it fell even lower. Overall, the token’s price is 87.26% below its all-time high of $39.81, which was recorded on May 12, 2021.

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