Centralized crypto exchange and lending platform BlockFi joined Geminis, CryptoCom, and other digital asset firms in massively trimming its staff size in the light of a downtrend wave storming 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.
Buckle Up for the 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. However, the dramatic shift in market conditions starting from Q1 2022 has forced BlockFi to halt its expansion and readjust its strategy.
Prioritizing profitability, the company said it would eliminate four major operating expenses, including reductions in marketing expenses and executive compensations, slowing headcount growth, and eliminating non-critical vendors. Despite the dramatic cut in staff, the firm stated that it would not impact its services for over 650,000 global clients.
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.
A Storm Is Here
CryptoCom CEO Kris Marszalek said over a Twitter thread that the Singapore-based exchange is set to lay off 5% or approximately 260 employees amid extended 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. Publicly-traded company Coinbase said that it had withdrawn some job offers and indefinitely extended a hiring freeze around the same time.
Compared to its rival exchanges, Binance – the world’s largest crypto exchange – has an opposite approach to recruitment. CEO Changpeng Zhao (CZ) noted that crypto winter is the best time to acquire talents as the company can leverage the low compensation rate for hiring during a market downturn.
Previously, FTX’s CEO SBF tweeted that his exchange would continue onboarding new staff as they had during the days of positive market conditions. He explained that slowing down hiring efforts in February was meant to let new employees receive better mentorship from old employees.