Crypto Layoffs Continue as CEOs Focus on Crypto Winter Concerns

The crypto world is struggling and it seems that the struggle is catching up to employees. Coinbase was one of many crypto exchanges to let go of employees in response to the struggling market. In the wake of so many layoffs, are crypto jobs still booming? Experts say the demand remains.

Several crypto companies have laid off staff such as BlockFi, Crypto.com, Robinhood, Bitmex, Gemini, Bitso, and Coinbase. Gemini in particular has made its second round of layoffs and it seems that more are on the horizon.

In a regulatory filing, Coinbase warned that layoffs were pending. The filing included a section discussing layoffs. The filing said that the company was focusing on restructuring the business in response to the current market. The goal was to reduce the staff by nearly 1,100 or approximately 18 percent.

Brian Armstrong, the CEO and co-founder of Coinbase, put out a blog post in which he addressed the layoffs. He led with three main reasons for the layoffs: fluctuating economic conditions, cost management, and growth. Armstrong stated that Coinbase bit off more than it could chew when it went through its rapid regrowth period.

He said of 2021's growth period, "At the time, we were in the early innings of the bull run, and adoption of crypto products was exploding." Armstrong also said, "We saw the opportunities but we needed to massively scale our team to be positioned to compete in a broad array of bets." He ultimately concluded that while the company tried to balance the rate of growth, it's now evident that Coinbase simply hired too many people too quickly.

In the wake of the massive layoffs, the company offered terminated employees a minimum of 14 weeks of severance pay along with an additional two weeks for every year the person remains unemployed after one year. Terminated employees were given four months of their COBRA health insurance and mental health resources. Lastly, those who lost their jobs received access to Talent Hub, which will provide portfolio-building services and job-hunting assistance.

Armstrong's focus on the current economy brings to light the renewed concern of a "crypto winter." He wrote in the blog post that after more than 10 years, a recession was likely imminent and would create another crypto winter. He pointed out that during the crypto winters, trading revenue decreases. Armstrong wrote, "Coinbase has survived through four major crypto winters, and we've created long-term success by carefully managing our spending through every down period."

According to The Wall Street Journal, earlier this year Coinbase reported a loss of $429.7 million ($1.98 a share) for the first quarter. The previous year, the company posted earnings of $387.7 million ($3.05 a share). Coinbase was also apparently struggling with its staff earlier this year when Armstrong posted a tweet in response to calls for Coinbase's executives to be replaced. He urged those who didn't believe in the company to quit.

Crypto exchange Gemini keeps axing its staff. In June, the exchange gave the boot to 10 percent of its staff citing crypto winter concerns. Gemini CEOs Tyler and Cameron Winklevoss said the crypto industry is experiencing moments of equilibrium "or stasis that is punctuated by dramatic moments of hypergrowth, followed by sharp contractions that settle down to a new equilibrium...what our industry refers to as 'crypto winter.'"

Now Gemini has made another round of layoffs. The company hasn't given exact figures for how many people it let go but it has been reported that the number is around 7 percent. However, an anonymous source told TechCrunch that the layoff waves were just the beginning for Gemini and that more will come.

The founder of BlockchainHeadhunter, Michael Shlayhen, said though companies have been struggling, "there are still some companies with healthy treasuries and lengthy runways who are continuing to hire ambitiously." Also, Daniel Adler who is the founder of Cryptocurrency Jobs said that companies have had enough time to stabilize, "teams have had time to adjust to market conditions and the macro environment, and so are able to make more informed decisions."

CryptoNews cites these jobs as being "crypto winter proof"

• Blockchain security architect
• Senior blockchain engineer
• Business development manager
• Content manager
• Accountants

The Wall Street Journal also reported that the demand for lawyers is skyrocketing. John Konstant with Whistler Partners says, "In the crypto space the consensus is you need to have someone in-house early." The salaries are pulling lawyers away from even the most competitive in-house positions.