Cryptocurrency companies saw a drastic increase in layoffs in the months of June 2022, November 2022, and January 2023, following two major corporate failures in 2022.
In May 2022, the Terra Luna crash caused significant damage to the cryptocurrency market and industry, creating huge waves and bringing down big-name companies like Three Arrows Capital, Voyager, and BlockFi. Due to Terra Luna’s fall, the number of layoffs in the crypto space jumped to 3,003 in June, 13.4 times the average monthly layoffs and a yearly record.
Companies in the industry received another slap in the face in early November 2022 when Sam Bankman-Fried’s cryptocurrency exchange FTX collapsed, sweeping the space like another avalanche. This month, cryptocurrency companies laid off 1,805 employees, which is 8 times the monthly average. As investors rushed to withdraw their funds, centralized cryptocurrency exchanges alone accounted for 82.2% of the monthly cuts.
The number of crypto layoffs fell to 649 in December 2022, likely because companies did not want to cut staff even more during the holiday season. Despite this, the downsizing in December was almost three times the monthly average.
A According to a survey by CoinGecko crypto layoffs in 2022 hit firms in San Francisco, Dubai, and New York the hardest.
The new year didn’t bring anything good either
At the beginning of the new year, layoffs jumped again, and in January 2023, companies said goodbye to 2,806 people. This was the second worst month in terms of crypto layoffs. Cryptocurrency exchanges attributed the reduction to lower trading volumes.
The number of crypto employees laid off in January 2023 alone will account for 41% of the industry’s layoffs in all of 2022, and we don’t know where it will end as the bear market and tough global macroeconomic conditions continue to dramatically affect companies.
Despite the high-profile crypto crashes of recent months, layoffs in the space have been in line with tech layoff trends so far this year.