Three major cryptocurrency companies almost simultaneously announced the mass layoff of their staff by up to 30%. The three begetters are Galaxy Digital, BitMEX, and Digital Currency Group. What’s actually going on and if one may still call it a coincidence – let’s observe.
What happened?
- On Wednesday, November 2, amidst the overall downturn in the crypto market and in less than half a day, three well-established companies made public statements about either curtailing their staff or planning to curtail it in the nearest future.
- Thus, eventual job cuts in the Web3 financial service enterprise Galaxy Digital could reach up to 20%, according to a Galaxy representative. Currently, the company counts 375 employees and plans to soon redesign its “team structure and strategy”. Initially, Galaxy promised to carry out “selective shrinking” of its staff, as per co-founder Michael Novogratz, instead of firing almost a quarter of the workforce and claimed the company’s expansion by over 400 new employees this year.
- Next came the announcement from BitMEX – the peer-to-peer exchange pioneered in trading crypto derivatives: the company reportedly planned to lay off 30% of its staff. However, later, a spokesperson made it clear that the final numbers would be lower, yet without revealing exact figures. The news of layoffs appeared after the departure of CEO Alexander Höptner and came up parallel to the announcement about the company’s switch from the spot market strategy.
- In turn, North American venture capital company Digital Currency Group (DCG) declared that the estimated layoff would make up about 10% of its 100 staff and was caused by personnel reshuffling. According to a spokesperson, the measure was but a result of the firm’s internal restructuring within the preparation for the further growth stage, contrary to BitMex and Galaxy Digital cases. “We are streamlining of our departments alongside several promotions on our leadership team,” claimed a DCG representative.
Layoffs in 2022: coincidence or tendency?
- This year, the naturally unstable crypto market has seen too many ups and downs this year. Against the backdrop of a drastic slump, the Federal Reserve raises interest rates to fight inflation, which results in mass layoffs among the bigger players, including brokerage firm Genesis Global Trading, crypto exchanges Gemini, Coinbase Global Inc., and Crypto.com, lending start-up BlockFi, and many others.
- All these cutbacks happened in the period from June to November 2022, with Coinbase firing around 1,100 workers as part of their cost-reducing strategy, Crypto.com – up to 40% while also ending key brand partnerships, Gemini – up to 15%, as per July announcements, Genesis – around 20% of its 260 employees, and the crypto lender BlockFi cut down about 20% of its staff. Each of these cases may have had its own particular reasons, yet could not remain indifferent to global tumults.
- These measures were said to be forced by the general “macroeconomic conditions” and followed the 2022 slump of coin prices, the bankruptcy of the hedge fund Three Arrows Capital, to which many of the firms were tied financially, and apparent geopolitical tensions.