Massive Layoffs as Crypto Market Continues to Slump

In a blog post on Monday, BlockFi revealed that it is saying goodbye to around 200 out of a total of 850 employees, with CEO Zac Prince noting that the layoffs stem from a “dramatic shift in macroeconomic conditions”.

“On the path towards profitability, we have been managing costs throughout our business such as: reducing marketing spend, eliminating non-critical vendors, reducing executive compensation for myself, Flori and other execs, slowing headcount growth and reducing our team size,” he tweeted.

The company also emphasized that it has reduced its staff after a period of explosive growth. For example, in late 2020, the company employed only 150 people, almost eight times fewer workers than today.

Meanwhile, Crypto.com, according to its CEO Kris Marszalek, is parting with around 5% of its workforce, i.e. 260 workers. Like BlockFi, it explains its decision to cut staff by the ongoing financial difficulties that were non-existent just half a year ago. In November 2021, the company reportedly spent a sizeable amount of money – $700 million – for an ad to be placed at a sports arena in Los Angeles.

Similarly, Coinbase, the largest U.S.-based crypto exchange, said it is looking to lay off over a thousand employees after volatile crypto markets have lost more than $2 trillion in value since 2021.

Commenting on Bitcoin and Ethereum’s subpar performance, which are trading at $22,596 and $1,237 respectively press-time, Coinbase’s CEO Brian Armstrong warned of a looming recession. 

“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,” Armstrong wrote. “In the past crypto winters, trading revenue (our largest revenue source) has declined significantly. While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.”

He added:

We also grew quite quickly over the past two years and have begun to operate less efficiently at our new size. It will take us some time to adjust to this new scale before growing again.

Other large companies took a hit too. Celsius, a lending platform, has halted withdrawals, citing “extreme market conditions.” 

Meanwhile, Binance, which has been recently accused of becoming a hotbed for crime, paused Bitcoin withdrawals for about three hours due to technical issues.