This week, the crypto industry has witnessed a surge in staff layoffs despite the ongoing market surge. This development surprises investors, as it contradicts the typical narrative of a bull market. Usually, crypto companies expand their workforce during periods of growth and optimism.
Crypto Firms Lay Off Staff
Consensys, a blockchain technology company and creator of the popular non-custodial wallet MetaMask has announced a significant restructuring effort. The company will lay off approximately 20% of its workforce. Its co-founder, Joseph Lubin, assured the company would provide comprehensive support to impacted employees.
The layoffs at Consensys coincided with a similar restructuring move by the decentralized derivatives platform dYdX, which also announced a 35% staff reduction. Notably, this marks another significant development for the firm this year. Earlier, its CEO, Anthonio Juliano, temporarily stepped down from his executive role, returning in October to address the company’s direction.
The latest operational restructuring comes from Kraken, an American-based crypto exchange that announced the layoff of 15% of its workers and the appointment of a new co-chief executive, Arjun Sethi. Interestingly, the company’s latest move comes after it revealed its plans to launch its layer-2 blockchain in 2025.
Why Crypto Firms are Reducing Workforce
Currently, the crypto industry is facing regulatory uncertainty more than ever in its history, leading to increased compliance costs, reduced investor confidence, and delayed product launches. Companies like Consensys claim to mitigate these challenges by resorting to layoffs. Its CEO criticized the U.S. Securities and Exchange Commission for overstepping its authority.
On the other hand, Kraken claimed that its layoffs are intended to achieve its mission of becoming the largest crypto platform. It acknowledged that its growth to over $1 billion in net revenue led to the creation of unnecessary organizational layers, which resulted in managers prioritizing their success over the company’s. The exchange believes the staff cut makes it “leaner and faster.”
Surprisingly, this supposed crypto bull market is unlike previous ones due to increased regulation, approved crypto ETFs, and growth in DeFi. Despite the market’s upward trend, layoffs have occurred, reflecting the industry’s transformation. As crypto continues to grow, users may expect more unusual occurrences.
