At the beginning of 2021, it seemed that cryptocurrencies had hit their stride. Not only was the value of established currencies like Bitcoin soaring, but a new cryptocurrency was crawling out of the woodwork every other week.
But the market eventually peaked in November 2021 with a value of $3 trillion.
As members of the public were drawn in by this world of digital currency, renowned fund manager Michael Burry offered a stark warning: “All [cryptocurrency] hype/speculation is doing is drawing in retail before the mother of all crashes.”
Many cryptocurrency companies are now experiencing the prophesized downturn in their profits. In fact, CoinMarketCap found the market is worth $903.2 billion as of June 22.
As a result of this decline in value, crypto companies have seen a stark impact on their headcounts.
Job losses in crypto
Business Insider has estimated that crypto exchange companies have laid off an accumulative 1,700 employees in the last month. Notable job cuts have come from Gemini, Crypto.com, BlockFi, and Coinbase.
On June 2, Gemini announced that it would be letting go of 10% of its workforce (which is roughly 100 people). The company noted that this decision was made because of fluctuations in the crypto market.
In a joint statement, Cameron and Tyler Winklevoss, co-founders of Gemini commented: “The crypto revolution is well underway and its impact will continue to be profound. But its trajectory has been anything but gradual or predictable.
Similarly, Crypto.com revealed that it was laying off 5% of its employees (approximately 260 staff).
The highest percentage of redundancies so far this month came from BlockFi. The crypto exchange company is removing 20% of its positions which equates to 170 employees.
The largest number of employee lay-offs have been seen at Coinbase. The company has scrapped 1,100 jobs. In a blog post, Coinbase’s CEO and co-founder, Brian Armstrong, noted: “We appear to be entering a after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period.”
Smaller companies like Bisto and Buenbit have also had to cut jobs.
Takeaways from the job cuts
Naturally, cryptocurrency and the businesses associated with it are volatile because they depend on a largely unregulated market of investors.
Nonetheless, the downturn of this market shows a need to accurately forecast future staffing needs and recognize potential shortcomings. While managers may call out for larger teams to help with the workload, it is vital to make sure that a hiring strategy is sustainable and considered.
That means understanding what workload can be achieved without burning out staff and appreciating how quality talent acquisition can tangibly build the business long-term.
If businesses do this and make a strategy that accounts for the fluctuations of the economy they can create a sustainable workforce.
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