The past few months have seen a host of crypto companies announcing layoffs in an attempt to cut costs amid a bear market. Now, crypto exchange Gemini has cut an extra 7% of its workforce — on top of the 10% it already trimmed seven weeks ago.
On June 2, roughly 100 employees were told they would be let go. An additional 68 employees were told the same on Monday, according to a source close to the company. The spree may not end there; a leaked internal document reveals more lay-offs could be in store.
On July 14, an operating plan made the rounds both within the Gemini office and an anonymous network called Blind, that revealed the firm would be reduced another 15%, from around 950 to 800 employees.
Many other large crypto firms have also been forced to layoff staff to immediately cut costs; most recently, largest NFT marketplace OpenSea said it would let go 20% of its workforce.
In total, the latest crypto bear market has seen at least 2,000 employees laid off from large-scale firms. These include:
- Coinbase (1,100 employees, about 18%)
- Crypto.com (260 staff, roughly 5%)
- BlockFi (170 staff, about 20%)
- Argentina-based crypto exchange Buenbit (80 employees, a whopping 45% of its workforce)
- Bitpanda (270 staff, about 33%)
- Bullish (30 employees, less than 10%)
- Gemini (100 employees, or 10% — and now a further 68 staff, or 7%)
Celsius Network, which made headlines for filing for bankruptcy, has also cut 150 employees amid a restructuring. Crypto exchange Huobi Global is expected to cut around 300 of its 1,000 employees (30%) thanks to China’s decision to ban crypto trading last year, which caused Huobi to see a significant revenue drop.
Crypto layoffs may have knock-on effects
Announcing a second round of lay-offs (and potentially more) is undoubtedly bad for a company’s reputation. But do it just once, and the damage is already done — as research shows, mass lay-offs rarely ever go the way companies want them to in the long-term.
“Layoffs are so embedded in business as a short-term solution for lowering costs that managers ignore the fact that they create more problems than they solve,” according to an article in Harvard Business Review.
Indeed, several studies cited in the piece show that when companies lose employees, they take with them a wealth of knowledge, networks, and morale.
- Downsizing leads to an increase in remaining employees choosing to leave in the following years.
- Those that stay are likely to be less happy at work, affecting job performance and commitment to the company.
- Large-scale layoffs also negatively affect company reputation and relationships with clients.
Research aside, anyone that’s survived a company ‘restructuring’ can attest to the challenges it lays in its wake. It remains to be seen how crypto companies will bounce back after what many are calling the worst ‘crypto winter’ to date. Some, like Binance and Nexo, have been all too eager to share they’re still actively hiring.
Smaller firms we haven’t heard from are likely taking whatever measures they can to avoid shedding employees. Perhaps these companies, that are quietly holding their head just above water, clinging to the talent, morale, and knowledge of their workforce, will come out on top once the crypto sun shines again.