The year 2022 has been brutal on the crypto markets and companies active in the space. Numerous firms were forced to lay off people, and that trend continued in early 2023.
It isn’t hard to see why crypto wasn’t the hottest industry throughout 2022. It fell in line with all other financial markets, which suffered from global economic turmoil. Most stocks plummeted in value – although some, like Netflix, rebounded quickly – yet crypto assets continued trending lower. Thankfully, the markets came back in January, even if the bearish pressure has not subsided yet.
One side effect of that terrible market performance is the sheer number of industry layoffs. Falling market prices diminish interest in cryptocurrency products and services. That leads to companies generating less revenue while costs remain high or even increase. As such, there were plenty of layoffs in 2022, and things look bleak in early 2023.
Last year saw over 3,000 layoffs in June 2022. That is partially due to the collapse of the Terra ecosystem. Following the depegging of UST, the Terra ecosystem collapsed entirely. Do Kwon is still at large and wanted by authorities. However, the users affected by the Terra collapse will not be reimbursed either way. Ultimately, the chain forked into Terra Luna Classic, although it has lost virtually all momentum.
The months following the Terra collapse saw relatively “normal” layoff rates. July was a big month with 567, although August, September, and October never surpassed 186 per month. Things seemed to stabilize after a turbulent period, but things are never smooth sailing in crypto land.
November 2022 yielded yet another rude awakening. Popular crypto exchange FTX collapsed and dragged down hundreds of firms with it. Most of those were subsidiaries of FTX or acquired firms and service providers. However, another 1,805 people lost their job. That represents two big spikes in quick succession. Crypto industry volatility goes beyond prices and applies to job security too.
Unfortunately, 2023 is off to a very rocky start. January has yielded another 2,806 layoffs. That is primarily the result of the Terra and FTX collapse’s fallout, which still sends shockwaves throughout the industry today.
In addition, other companies, like Celsius and 3AC, have caused tremendous liquidity issues for service providers. Even Gemini, the popular exchange, cannot pay users engaging in their “Earn” program. A very problematic scenario and one that will lead to more job losses unless something changes.
What is more problematic is the sheer number of layoffs in January. It represents 41% of all jobs lost in 2022 combined. Although market sentiment improved, there is more bearish pressure to contend with. As such, it is plausible to assume there will be more job losses ahead.
Companies letting people go in January included Prime Trust, CoinTracker, Matrixport, Shakepay, Luno, Gemini, Blockchain.com, Crypto.com, CoinDCX, Coinbase, ConsenSys, Huobi, SuperRare, Genesis, and Wyre.
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