BlockFi, a central crypto exchange and lending platform, joined Geminis and CryptoCom to massively reduce its staff size in light of the downtrend that was sweeping the industry. Roughly 20% of its 850+ employees are set to be laid off, according to the company’s blog post penned by co-founders Zac Prince and Flori Marquez.
Get ready for winter!
The blog post cited “the dramatic shift in macroeconomic conditions worldwide” as the main cause of the mass layoffs. The latest staff cut impacts every team at the company, as it aims to cut expenses in preparation for an “extended global recession.”
Since the end of 2020, the firm’s staff has grown from 150 to the current size of over 850. BlockFi was forced to stop its expansion due to the dramatic changes in market conditions that began in Q1 2022.
Prioritizing profitability, it stated that four of its major operating expenses would be eliminated, including marketing expenses reductions, slower headcount growth, and the elimination of non-critical vendors. The firm claimed that the drastic reduction in staff would not affect its services to over 650,000 clients around the world, despite the fact that the headcount growth has slowed.
Reportedly, BlockFi closed a down-round last week with a mere valuation of $1 billion – a substantial decline from the estimated valuation of over $5 billion last year.
The Storm is Here
Kris Marszalek, CryptoCom CEO said that over a Twitter threadThe Singapore-based exchange will lay off approximately 5% of its employees during prolonged market selloffs.
Two weeks ago, Winklevoss-led Gemini also announced a 10% staff cut, acknowledging that the company was in a contraction phase and also citing “macroeconomic turmoil” as the major catalyst of such a move. Coinbase, which is publicly traded, stated that it had withheld some job offers from the company and indefinitely extended its hiring freeze.
Compared to its rival exchanges, Binance – the world’s largest crypto exchange – has an opposite approach to recruitment. Changpeng Zhao (CZ), CEO, noted that crypto winter is the best period to recruit talent as it can use the low compensation rate for hiring during market downturns.
Previously, FTX’s CEO SBF tweetedHis exchange would continue to hire new staff, just like they did in the positive market. He explained that he had slowed down his February hiring efforts to allow new employees to receive mentorship from older employees.