Crypto.com Announces 20% Layoffs to Navigate the Prolonged Crypto Winter
Crypto.com is set to reduce its headcount by 20%, citing the prevailing crypto winter. The firm indicated that the economic headwinds and prolonged crypto market downturn are gradually eroding its financial health.
Crypto.com outlined that the FTX implosion aggravated economic headwinds due to its contagion. The firm indicated the layoffs are inevitable since the crisis has engulfed other exchanges, lenders and providers of custodial services reeling from declined transactions volume, profits and defaults.
Economic Downtrend Hampering Crypto.com
Crypto.com’s announcement on January 12 acknowledged its operations are no exception to the economic downtrend. The firm added that layoffs are inevitable to minimize operational costs.
The crypto firm’s chief executive and founder, Kris Marszalek, confessed that Crypto.com grew ambitiously at the onset of 2022. He added that the uptrend momentum matched the trajectory experienced in the broader crypto industry. Nonetheless, Marszalek regretted that the crypto industry trajectory suddenly changed to a negative downtrend that wiped out early 2022 gains.
The 20% job cuts are set to affect a significant contingent of the Crypto.com workforce. From the previous Crypto.com revelation, its workforce approximates between 3500 and 4500 employees. The second wave of layoffs comes after an October report revealed Crypto.com had downsized its global workforce in mid-2022 by 2000 employees.
Layoffs Factored in Prudent Financial Management
The recent job cuts announcement is hot on the heels of July 2022 layoffs, where Crypto.com cited industry slowdown following the downfall of the Terra ecosystem, eroding a multi-dollar investment. Coincidentally, Crypto.com suffered heavily in the subsequent collapse of Three Arrows Capital, making the mid-2022 layoffs necessary.
In his statement confirming the 20% layoff, Marszalek indicated that the July headcount reductions targeted navigating the prevailing macroeconomic downturn. The chief executive cited that the reductions hardly projected the impact of FTX collapse. Marszalek regretted that the FTX downfall turned calamitous by eroding trust in the broader crypto industry.
Explaining the recent layoff, Marszalek observed that the job cuts would affect 700 to 900 employees. He emphasized the need for prudent financial management through additional reductions that will align Crypto.com to realize long-term success.
Crypto.com’s announcement places the firm among the latest firms, including Consenys, Blockchain.com and Coinbase, to downsize a significant portion of its workforce.
The headcount reduction is timely given that Crypto.com is battling a sharp decline of its CRO token by 96%. Also, the active addresses have suddenly reduced from 2114 to 640.
Editorial credit: Ascannio / Shutterstock.com
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