The macroeconomic slowdown has led to an increasing number of layoffs in the cryptocurrency industry. After Coinbase, BlockFi and Crypto.com, crypto firm Blockchain.com was the latest name to join the list.
Blockchain.com, a cryptocurrency financial services firm, announced this week that it would be cutting nearly 25% of its workforce.
The firm cited turbulent market conditions as the main reason. This figure shows a reduction of 450 employees as the company reached 600 employees in the last 16 months.
Blockchain.com Makes the Cut
In an interview with CoinDesk, a Blockchain.com spokesperson said the cuts will accommodate the firm’s expansion strategies in other areas such as institutional lending, NFTs and blockchain gaming.
After initially planning to expand to several countries, Blockchain.com has been forced to change course. The representative office in Argentina is also closed.
Blockchain.com has provided fired employees four to twelve weeks of severance pay. The firm will also provide job placement assistance for US and UK employees. This form of endorsement is conducted through a third party.
In addition to job cuts, the firm also slashes executive pay and CEO compensation to avoid a prolonged recession.
3AC can’t be done yet
Blockchain.com is among the crypto companies closely linked to troubled crypto VC Three Arrows Capital (3AC). The collapse of 3AC and its bankruptcy filing has severely affected a range of other concerned parties – most notably Voyager Digital, BlockFi, and many others.
Blockchain.com CEO Peter Smith previously said that 3AC’s fallout could result in a loss of $270 million for his company. Now we see the result.
“(Blockchain.com) remains liquid, solvent and our customers will not be affected,” Smith said.
Huge wave of workforce reduction
Blockchain.com isn’t the only company that has laid off its workforce.
Several other important firms in this industry, such as Bybit, Coinbase and Crypto.com, are in a similar scenario. There is a growing number of cryptocurrency companies that have made layoffs as a cost-saving maneuver.
Last week, OpenSea – the popular NFT trading platform – decided to lay off 20% of its employees who were facing a tough situation in the cryptocurrency market.
OpenSea’s decision to fire was probably a forced choice. According to the data, the trading volume of the platform has dropped sharply from its peak in early 2022.
Coinbase, the world’s largest cryptocurrency exchange, announced a layoff of more than 1,000 employees, while other companies also laid off around 20%.
The fall in the price of cryptocurrency and a number of scandalous incidents involving large crypto lending platforms and venture capitalists are causing ripples around the world.
The number of people who had to leave their jobs at Coinbase in the backdrop of the market’s continuing decline, accounted for about a fifth of all the workforce. The exchange employs about 5,000 full-time employees.
The company said it had planned to stop hiring, but was forced to do so after two weeks of market volatility. The exchange announced earlier this year that it would hire 2,000 more employees, but the plan failed.
Recession or Global Recession?
The wave of pain shook not only the United States but also other operations around the world. Crypto.com, a Singapore-based company, announced 260 cuts in early June, accounting for 5% of its workforce.
Several cryptocurrency companies, including Gemini, Mercado Bitcoin and Bitso, have also laid off at least 10% of their workforce.
There is conflict everywhere in the form of crypto market craters. Billions of dollars are gone in market cap. NFT sales plummet and major players in the industry are in trouble.
But this will not be the end. It all feels like the beginning of something bigger.