The macroeconomic downturn has led to a growing number of layoffs across the cryptocurrency industry. Following 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 cut its workforce by around 25%.
The firm cited turbulent market conditions as the main reason. That figure showcases a downsizing to 450 employees as the firm reached 600 employees over the past 16 months.
Blockchain.com Makes The Cut
In an interview with CoinDesk, a spokesperson of Blockchain.com said that the cutback will adjust the firm’s expansion strategies in other areas such as institutional lending, NFT, and blockchain gaming.
After initially planning to expand to multiple countries, Blockchain.com has been forced to shift course. The representative office in Argentina is also closed.
Blockchain.com has provided four to twelve weeks of severance pay to laid-off workers. The firm also will offer job placement assistance for U.S. and U.K employees. This form of support is conducted through a third party.
In addition to cutting jobs, the firm also conducts a reduction on executive salaries and CEO compensation to survive the prolonged downturn.
3AC May Not Be Done Yet
Blockchain.com is amongst the crypto companies that are closely linked to the troubled crypto VC Three Arrow Capital (3AC). The collapse of 3AC and its bankruptcy filing has severely affected a series of other related parties – particularly Voyager Digital, BlockFi, and many more.
Peter Smith, CEO of Blockchain.com, previously noted that the 3AC fallout could bring a loss of $270 million to his company. We now see the consequences.
“(BlockchainCom) remains liquid, solvent and our customers will not be impacted,” said Smith.
Massive Wave of Workforce Reduction
Blockchain.com is not the only company that has reduced its employees.
A number of other significant firms in this industry, like ByBit, Coinbase, and Crypto.com, are in a similar scenario. There is a growing number of cryptocurrency companies that have conducted layoffs as cost-saving maneuvers.
Last week, OpenSea – the popular NFT trading platform came to the decision to clear out 20% of its employees, facing a difficult situation in the cryptocurrency market.
OpenSea’s decision to fire was probably a forced choice. According to statistics, the trading volume of the platform has dropped sharply from its peak in the early months of 2022.
Coinbase, the world’s largest cryptocurrency exchange, announced a reduction of more than 1,000 employees while other companies also laid off about 20% of employees.
The wave is sweeping the world after the cryptocurrency price collapsed and a slew of scandalous events involving big crypto lending platforms and venture capitalists.
In the backdrop of the market constantly losing its bottom, the number of people who had to quit their job at Coinbase accounted for about a fifth of all workforce. This exchange employs around 5,000 full-time workers.
The company stated that it had planned to halt hiring but was obliged to do so following two weeks of market instability. This exchange announced earlier this year that it would hire 2,000 more staff, but the plan fell through.
Recession or Global Depression?
The wave of pain blasted the United States but also other operations around the world. Crypto.com, a Singapore-based company, announced 260 cuts in early June, amounting to 5% of its workforce.
Many cryptocurrency companies, including Gemini, Mercado Bitcoin, and Bitso, have also laid off at least 10% of their workforce.
Struggle is everywhere as the crypto market craters. Billions of dollars in market cap are gone. NFT sales dwindle and major players in the industry are in jeopardy.
But this won’t be the end. It all feels a lot more like the beginning of something big.