Crypto layoff season continues despite January gains — Here’s a look at all the firms downsizing

The broader crypto market went through an extremely rough patch last year. Cryptocurrency prices were on the decline and the contagion effect from the FTX and Terra collapses sent the cryptoverse into a rapid downward spiral.

Eventually, to stay afloat, several crypto companies started laying off employees. As such, a CoinDesk report says that nearly 29,000 people in the Web3 industry lost their jobs in 2022. Some of the firms forced to downsize include top crypto companies such as Binance, Coinbase, Kraken, Gemini, and several others.

Fortunately, 2023 kicked off to a good start for the global crypto market, and it seemed like things would begin to stabilise. However, several crypto firms are still finding it hard to shake off the effect of the previous year, resulting in the crypto layoff season continuing well into 2023.

Here’s a look at the latest crypto firms to join the downsizing bandwagon.

Chainalysis is one of the top crypto forensic firms in the world. Several private and public sector giants depend on the company for their crypto intelligence and analytics. Therefore, over the years, Chainanalysis has come to count the FBI, the DEA, the SEC, Robinhood, BNY Mellon and several other large and influential entities as its clients.

However, the firm hasn’t gotten off to a great start in 2023 and plans to trim its workforce by 5 percent. As per a Forbes report, Chainalysis currently has around 900 employees. Therefore, the downsizing drive shouldn’t result in more than 40 or 50 people losing their jobs. According to several sources, non-core personnel, including members of the sales team, will be shown the door as part of the layoff.

Moreover, the company is also looking to reorganise its workforce. This will mean that some employees will have new roles and responsibilities. However, it should also help ensure fewer job losses.

According to a recent email that was leaked on Twitter, Bittrex, a prominent crypto exchange, announced that they too are going to lay off more than 80 people from their team. According to CEO Richie Lai, the deteriorating market conditions compelled the company to take this decision. Lai also cited the contagion effects of the previous year’s crypto winter as the reason for downsizing.

“The market downturn triggered by multiple failures in the crypto ecosystem became an outright collapse by the end of the year,” he wrote. “These events have caused us to reset our strategy and balance our investments with the new economic environment in which we find ourselves,” he added.

On the other hand, Protocol Labs, the company that developed the popular cryptocurrency Filecoin, stated that it will be reducing its workforce by 21 percent, resulting in the termination of 89 employees.

The announcement was part of a blog post issued by the CEO of Protocol Labs, Juan Benet. According to this post, the layoffs are the direct result of an “extended winter” and the decision was made to align the company’s resources towards the “most impactful and business-critical efforts.”

However, Benet did not emphasise whether the Filecoin team will be affected or not. Regardless, Filecoin’s native cryptocurrency, FIL, remained relatively unphased by the announcement.

The post also goes on to state that impacted employees will have one-on-one meetings where they will be taken through their “standard severance” packaged and offered placement support.

There were more than 3,000 reported crypto job losses in January 2023. This is quite surprising given the positive sentiment that filled the cryptoverse as the year began. However, it seems like crypto firms are finding it hard to overcome the damages from 2022.

Coinbase and Crypto.com contributed to the largest chunk of job losses last month, cutting down on 950 and 700 roles respectively. These shockers came just days apart, with Coinbase breaking the news on Jan 10 and Crypto.com following suit on January 13.

More recently, on January 24, popular crypto exchange Gemini reduced its workforce by 10 percent. A day later, Luno laid off 35 percent of its 600 employees. Other firms to reduce their workforce in Jan include Prime Trust, Matrixport, OSL, Blokchain.com, ConsenSys, SuperRare, Huobi, Genesis, and Silvergate Capital.

The crypto layoff season has lasted well over a year now. However, with 2023 off to a bright start, perhaps we could see the trend being reversed in the coming months. But until then, all we can do is wait and watch, hoping that this will be the last round of layoffs of this year.