Coinbase, Gemini and others cut jobs, rescind offers and pause hiring as crypto winter hits hard

The crypto winter is not showing any signs of letting up. In the beginning, the downturn caused pain mainly for retail investors. However, crypto companies have also started to feel the cold over time, especially with the market showing no signs of improvement. Besides stuttering crypto prices, the tech sector has also been underperforming, making matters worse for these firms and forcing them to take a back foot on hiring.

Crypto exchanges have taken a particularly hard hit. Investors have begun to lose faith in the market, causing a drop in crypto trading volumes and massive losses. With this in mind, crypto exchange Gemini, published a blog post on June 2, 2022 announcing a 10 percent slash in their workforce.

“We have asked team leaders to ensure that they are focused only on products that are critical to our mission and assess whether their teams are right-sized for the current, turbulent market conditions that are likely to persist for some time. After much thought and consideration, we have made the difficult but necessary decision to part ways with approximately 10 percent of our workforce,” the post read.

Coinbase, Gemini and others cut jobs, rescind offers and pause hiring as crypto winter hits hard

It also described the crypto industry’s path as “punctuated equilibrium — periods of equilibrium or stasis that are punctuated by dramatic moments of hypergrowth, followed by sharp contractions that settle down to a new equilibrium that is higher than the one before.”

It added that geopolitical tension and deteriorating macroeconomic situation were the causes for the crypto turmoil. The only good news is that Gemini has promised a separation package and healthcare benefits for the affected employees.

Following suit, Coinbase, the world’s largest crypto exchange, also published a blog post on June 3, 2022 announcing a hiring hiatus. The exchange had already paused hiring two weeks before this announcement while they assessed the ongoing situation and figured out the path ahead. Managing headcount was cited as the primary area of focus in cutting costs.

“In response to the current market conditions and ongoing business prioritisation efforts, we will extend our hiring pause for both new and backfill roles for the foreseeable future and rescind a number of accepted offers,” the Coinbase blog by Chief People Officer L. J. Brock read. Coinbase is also reeling from a $430 million loss in the first quarter of 2022.

According to Coindesk, Argentinian crypto exchange Buenbit trimmed its workforce by 45 percent on May 23, 2022. The exchange that employed around 200 people became a team of 100 after the layoffs. Brazilian crypto exchange 2TM and Latin American exchange Bitso also laid off 80 employees each.

In an e-mail conversation with Coindesk, George Sutton, an equity analyst with Craig Hallum, said, “It is natural that the exchanges, which are currently seeing lower volumes, are cutting back. The beauty of this industry is there are a plethora of disruptive models in the digital currency and blockchain space to gladly hire any available talent. We view the volume declines as temporary.”

Also Read: The crypto (R)evolution

Correcting overturned investor sentiments could take some time, and the markets do not look poised for recovery yet. However, there’s always a silver lining to every cloud. Nicholas Strange, founder of hiring firm Crypto Talent told Coindesk that crypto firms with use cases that solve real-world problems are the most likely to survive through this phase of contraction. He added that all crypto organisations navigate a path of crests and troughs. It only makes them better at managing their coffers.

Moreover, the downturn has not affected all exchanges and crypto companies. FTX, the second-largest cryptocurrency exchange, is going in the opposite direction. It has recently expanded into the equities trading space to diversify its business. And while others are looking to downsize, FTX is even looking to acquire an Indian gaming startup called Mobile Premier League (MPL). And FTX isn’t alone. The digital arm of Fidelity, the multinational financial services company, is looking to its double headcount this year to cater to the growing demand of institutional crypto investors.