Layoffs Sweep Through Web3 as Firms Seek to Survive Crypto Winter
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- More web3 firms are reportedly announcing employee layoffs, indicating that the crypto winter effect is still being experienced by the industry.
- Several companies, including Blockchain.com, Immutable, Polygon Labs, Magic Eden, Dapper Labs, Elliptic, and Chainalysis, have already reduced their workforce due to the challenges faced by the crypto ecosystem in the last year.
- Reasons for the layoffs vary from putting resources towards the most important projects to balance product offerings with demand, right-sizing the company, corporate restructure, and adjusted operating expenses for this year.
The effect of the crypto winter seems to be continuously being experienced by multiple web3 firms as more projects and platforms offering crypto services are still axing their manpower.
In 2022, more than 26,000 employees had lost their crypto-related jobs, with the majority of layoffs citing the crypto-winter. This misfortune continued until January, when BitPinas covered a total of six entities that reduced the number of their employees in the metaverse, including Coinbase, Genesis, Silvergate Bank, Huobi, SuperRare Labs, and ConsenSys.
However, the layoffs did not just end last month, as there were more employee layoffs by web3 firms this year, such as:
Cryptocurrency brokerage company Blockchain.com has cut off 110 employees, which is about 28% of the firm’s workforce.
But this is not the first time that the firm has let go of its manpower, as it was forced to cut about 150 staff in July after facing a $270 million hit on loans it made to failed hedge fund Three Arrows Capital.
“The crypto ecosystem is facing significant headwinds as its course corrects from the challenges of the last year. To better balance product offerings with demand, we’ve made the difficult decision to reduce operating costs and headcount to rightsize the company,” a Blockchain.com spokesperson explained.
First reported by Australian publication The Sydney Morning Herald, crypto gaming company Immutable CEO and co-founder James Ferguson confirmed that the firm had cut 11% of its workforce.
According to Ferguson, the main reason for the layoff was to put its resources towards the most important projects. Affected staff were said to receive an average of 10 weeks’ redundancy pay, laptops, counseling, coaching, and outplacement services.
“I take full ownership for these actions. I am sorry to all Immutables impacted by these changes,” he wrote in a statement.
Citing the impact of the FTX crypto exchange implosion and subsequent downturn, Ethereum scaling platform Polygon Labs, which is also the firm behind the MATIC token, announced that it has laid off around 20% of its workforce, or around 100 positions in the company.
The cutoff has been said to affect employees mostly in the U.S., Canada, and India, where most of Polygon’s workforce is located.
“The treasury remains healthy, with a balance of more than $250 million and more than 1.9 billion MATIC, and we have crystallized our strategy for the next several years to help drive mass adoption of Web3 by scaling Ethereum,” Polygon Labs co-founder Sandeep Nailwal tweeted.
Meanwhile, even one of the top marketplaces for Solana NFTs, Magic Eden, has revealed that it has axed 22 of its staff to survive the harsh winter of the crypto economy.
“As part of a company-wide restructuring, we have made the difficult decision to part ways with 22 teammates. Nothing about this decision takes away from the talent, hardwork and dedication of this incredible group of people,” Jack Lu, the CEO and co-founder of Magic Eden, explained in a Twitter thread.
As part of the firm’s corporate restructure process, Dapper Labs CEO Roham Gharegozlou sent a letter to the team and confirmed that the company was laying off 20% of its full-time employees.
Citing that the firm had too-rapid growth, with a headcount ballooning from 100 to 600 employees in less than two years, Dapper Labs promised that the affected employees would receive generous compensation, health continuation benefits, extended exercise windows for equity stock options, and mental health benefits, as well as job search support.
“Dapper Labs remains in a strong cash position with no outstanding debt. We are committed to our flagship products, tremendously excited about several major launches coming up this year,” Gharegozlou stressed.
Dapper Labs is the developer of the NBA Top Shots NFT collection and the OG blockchain game, CryptoKitties.
With a total workforce of 199, blockchain analytics firm Elliptic has also laid off 10% of its employees, adding that the process was part of its adjusted operating expenses for this year.
“This was a difficult decision but demonstrates the kind of responsible leadership that the crypto industry needs from us as a blockchain analytics partner in the fight against financial crime in crypto,” Elliptic spokesperson said, according to digital media publication DL News.
Earlier this month, the firm appointed two senior employees to be part of its global leadership team, appointed a chief financial officer in New York and a chief people officer in London.
Mentioning the collapse of the private sector’s demand as digital-asset prices and trading volume plummeted and refocusing on developing new products focused on the finance sector and on public clients.
Chainalysis’ director of communications, Maddie Kennedy, confirmed that the firm had undergone a “reorganization” of less than 5% of the workforce, where some employees will have new roles and reporting lines while others, primarily in sales, were let go.
According to the company, it is heavily affected by the downfall in the interest of both the public and the government in digital assets and cryptocurrencies because of the crypto winter. Chainalysis has traditionally had a larger focus on governmental entities, including the U.S. Federal Bureau of Investigation, Drug Enforcement Administration, and Securities and Exchange Commission, which historically accounted for about 60% of sales.
Actively producing protocols, networks, and projects since 2013, Protocol Labs CEO Juan Benet announced through a statement that it is cutting 89 employees across PLGO teams, including PL Corp, PL Member Services, Network Goods, PL Outercore, and PL Starfleet.
“To ensure teams are well positioned to weather this extended winter, we have to reduce costs further. Although we worked extremely hard to avoid this, we’ve made the difficult decision to reduce our workforce by 89 roles (approximately 21%). We’ve had to focus our headcount against the most impactful and business critical efforts,” the statement read.
In the same letter, Benet promised that his talent team would also offer office hours to help polish resumes, surface relevant roles, and provide recommendations to the affected.
In a leaked email to its employees, nine-year-old crypto exchange Bittrex said that it failed to “aggressively” reduce expenses and increase efficiencies, forcing the company to reduce its workforce by more than 80 employees.
“The market downturn triggered by multiple failures in the crypto ecosystem became an outright collapse by the end of the year. These events have caused us to reset our strategy and balance our investments with the new economic environment in which we find ourselves,” Bittrex CEO Richie Lai explained.
Despite these firms’ not-so-good move in cutting off their workforce due to the crypto winter, cryptocurrency and web3 technologies have still seen tremendous growth in recent years. As more businesses and individuals begin to adopt these innovative technologies, the demand for skilled professionals in the crypto and web3 space is on the rise.
In a report by digital media publication The Wall Street Journal, Circle Internet Financial Ltd., the issuer of stablecoin USD Coin (USDC), announced its move to increase its workforce by as much as 25% this year as it pushes ahead with expansion despite its recently canceled deal to go public and industrywide layoffs.
If you are looking for a career in the crypto and web3 industry in the Philippines, you’re in luck. There are a plethora of job opportunities available, ranging from software development and data analysis to marketing and customer service. No matter your skill set or experience level, there is likely a position that is a good fit for you.
BitPinas has curated the list of available web3-related jobs in the country, whether full-time, part-time, or even remote jobs, here.
This article is published on BitPinas: Layoffs Sweep Through Web3 as Firms Seek to Survive Crypto Winter
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.