Crypto Companies Entering Layoff Season—Coinbase Workforce To Be Significantly Affected

The crypto market is beginning to make it clear that the industry is shifting to another season.

For the past few weeks, the market has seen the price volatility of Bitcoin. This also includes price action for Ethereum, Dogecoin, and many more.

Last month, numerous crypto traders and investors lost tremendously after the Terra blockchain burst. The crypto winter is indeed here.

Business Insider reports that multiple cryptocurrency companies are rolling out massive layoffs due to the current economic state.

Crypto Winter

The crypto winter is coming and so are the entailed layoffs. After reaching record highs in late 2021, the cryptocurrency industry experienced a crypto winter.

In November, the total value of the cryptocurrency market on a global scale reached its all-time high of $3 trillion, making it more valuable than either Microsoft or Apple at the time.

However, investors are fleeing cryptocurrencies due to concerns that a recession is about to begin and that inflation will continue to soar.

The current state of the market is being cited as the primary reason for the wave of company layoffs. The layoffs have already begun at Crypto.com, BlockFi, Coinbase, and Gemini.

Insider made a calculation of the number of affected workforce per company so far in June:

• Gemini stated they are cutting down 10% of their employees. It is estimated that Gemini has 1,000 employees, which means 100 employees could be laid off.

• Coinbase stated they will cut off 18%, it is estimated to be 1,100 employees.

• BlockFi said it was reducing 20% of its 850-strong workforce, or 170 employees.

Coinbase

Coinbase, the largest U.S. based crypto exchange, said it would be reducing its workforce by 18%, laying off approximately 1,100 employees after volatile crypto markets.

Coinbase CEO Brian Armstrong stated laying off this much employees will be done to keep the company healthy during this economic downturn.

According to an explanation written by Armstrong, "We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter and could last for an extended period. In past crypto winters, trading revenue (our largest revenue source) has declined significantly."

The CEO also admitted his mistakes stating they grew too quickly and over-hired in return.

Despite the unfortunate event, the company assured those who are affected will be given ample compensation, benefits, and help in finding a new role.

Gemini

Aside from Coinbase, the crypto platform Gemini also implemented a 10% cut in its workforce.

TechCrunch reported that the co-founders and twin brothers Cameron and Tyler Winklevoss,

attributed the layoffs to turbulent market conditions that are likely to persist for some time.

After giving it a great deal of thought and consideration, Gemini have come to the conclusion that, although it will be difficult, it is necessary to let go of approximately 10 % of their workforce.

According to Tyler and Cameron, "Impacted Astronauts will receive a calendar invite today for an individual conversation to provide information on the separation package and healthcare benefits we are providing. Our highest priority throughout will be to treat everyone affected with compassion and respect."

BlockFi

BlockFi also made it onto the list of crypto companies that downsized their employees. The company has been known for its savings products that favorably give clients a good interest rate on their cryptocurrency holdings.

In recent years, it has undergone a tremendous expansion thanks to the decline in the cost of borrowing money and the rise in the value of cryptocurrencies.

The number of workers employed by the company increased from 150 at the end of 2020 to more than 850 before the most recent round of layoffs.

CNBC reported that cryptocurrency lender BlockFi is laying off approximately 20 percent of its workforce as the company attempts to come to terms with a dramatic decline in cryptocurrencies and increased concerns about the state of the economy.

BlockFi CEO Zac Prince also went to Twitter to announce this layoff.