January 2023 saw an alarming increase in crypto-related layoffs, making it the second worst month on record. This new wave of layoffs had a huge impact on the industry, causing as many as 2,806 people to lose their jobs.
According to surveys, companies in the crypto industry have seen a significant increase in layoffs. The difficult global macroeconomic environment has negatively impacted company results, leading to an expected increase in layoffs in 2023. While the number of layoffs was close to 7,000 in 2020, this number is expected to increase by 2023.
In January, the figures showed that centralized crypto exchanges had played a major role in causing job losses, accounting for 84% of all layoffs. Research showed that lower trading volumes and declining revenues were the main reasons for this.
The stock markets are firing in a big way
In January, major crypto exchanges such as Huobi, Coinbase, Blockchain.com, Crypto.com and Luno announced rounds of layoffs.
For some companies, June 2022 was not the first month of layoffs being announced; Coinbase and Crypto.com had already downsized their workforces earlier in the year. It is not entirely unexpected that there will be layoffs during the current bear market. The stock markets grew extremely fast during the bull market and now that the income is disappointing, something must be done about it.
While the crypto industry has been hit hard by the arrival of crypto winter in a tough macroeconomic environment, layoffs have shown that many exchanges have overspent, forcing many companies to downsize their workforce.
June 2022 still tops the list with the highest number of layoffs in one month (3,003 people). This was a direct result of the crypto industry’s first major crisis of the year, triggered by the collapse of the Terra ecosystem. This crisis had a huge impact on the crypto industry, forcing many companies to lay off their staff. Although there has been a lot of recovery since then, June 2022 still tops the list with the highest number of layoffs in a single month.
Pressure on the sector intensified in November, after the FTX collapsed and the number of crypto companies getting into trouble increased. This resulted in 1,805 layoffs. Centralized crypto exchanges accounted for the lion’s share with 82.2% of layoffs.