Bitcoin’s best week in March 2022 has yet to generate enough impacts to allow optimism to resume in the crypto-asset sector.
Brokerage Crypto.com announced today that it will cut its workforce by 20%. With this announcement, layoffs at large companies in the sector, which also includes Metamask owner Consensys, as well as Huobi, Coinbase, Silvergate and Genesis, totaled nearly 1,600, with nearly daily announcements.
The layoffs, which accompany others in the US tech sector, are partly the result of a loss of investor appetite for risky assets, triggered by high interest rates in the US market.
In 2022, the United States saw 160,000 employees laid off at technology companies, after a massive spike between 2016 and 2021 when the country’s major companies doubled their workforce.
A change in corporate culture was also expected. As Scott Galloway, a professor of brand management at New York University, points out, since Elon Musk demonstrated that Twitter could operate with 70% fewer employees, other tech companies have followed suit.
In December, TCI, a hedge fund that owns $6 billion in shares of Alphabet, the company that owns Google, sent a letter to CEO Sundar Pichai, pointing out that Google has too many employees (Alphabet has 150,000 employees).
Cutting costs in an industry that could easily reach $150,000 per employee is one of Scott’s predictions for 2023.
In the cryptocurrency market, the layoffs come after a $2.2 trillion drop in total asset value, as well as the collapse of projects like FTX, Celsius, 3AC, and Luna.
The market was hit hard. However, one company claimed it was the other way around.
Binance, which owns 75% of the cryptocurrency market share, said in its year-end letter that the company’s employee count had doubled from 3,500 to more than 7,500 in 2022.
This year, the exchange founded by Changpeng Zhao expects to expand its workforce by 15-30%.