YEREVAN (CoinChapter.com) – The digital asset market has doubled its market cap since January 2023 and arrived at $1.63 trillion on Dec 28. However, the trend of increasing crypto layoffs that started in the first half of 2023 did not slow down. What happened?
A Wave of Reductions in H1 2023
2023 marked a challenging period for the cryptocurrency industry, with many crypto layoffs recorded in its first half. Major companies in the sector faced the brunt of a market downturn in Q4 2022. This period was characterized by a sharp decline in cryptocurrency values, leading to widespread negative market growth and a consequential wave of layoffs.
By March 2023, the industry witnessed an estimated loss of nearly 30,000 jobs as companies like Coinbase, Crypto.com, and Bittrex made substantial workforce reductions. Coinbase reduced its workforce by 20%, affecting about 950 employees. Notably, the crypto layoffs continued a trend of restructuring in the tech sector since 2022.
Similarly, Crypto.com announced a 20% cut in its global workforce, impacting nearly 900 employees. Other notable companies like Chainalysis, Dapper Labs, and Gemini also reported significant layoffs, underlining the severe impact of the market downturn on the crypto sector.However, despite the market recovery, the challenges did not stop in H2, 2023.
Will Crypto Layoffs Continue to 2024?
As 2023 progressed into its second half, the crypto industry faced workforce upheaval. Chainalysis initiated a second round of layoffs, reducing its workforce by 15%. GSR, a crypto market maker, announced a 10% reduction in staff, emphasizing the need for structural changes and efficiency improvements.
Other companies like Magic Eden, Protocol Labs, and Bittrex continued the trend, with Bittrex laying off 83 employees, nearly 30% of its workforce. Matrixport, Luno, and Bitcoin Suisse also joined the list of companies reducing their staff numbers, with Luno sacking 35% of its employees.
The industry giant Coinbase repeated its downsizing efforts, laying off 950 staff members in H2, 2023. ConsenSys and Blockchain.com also made significant workforce reductions, with ConsenSys cutting 11% of its workforce and Blockchain.com shedding 110 employees.
The crypto layoffs in both halves of 2023 highlight that the overall market cap increase does not yet mean the crypto market is out of the bearish woods. Companies, big and small, were forced to adapt rapidly to the changing economic landscape, often resulting in workforce reductions. Will the staff cuts continue into 2024? It depends on the macroeconomic climate and the overall tech industry inflows.
