Mass-layoffs continued in the first quarter of 2023 with over 2,400 people losing their jobs in the crypto industry.
However, market observers are bullish that the worst of the redundancy bloodbath is over as the number of total cuts was lower than in the last three months of 2022.
“We are 194% through the worst of this crypto winter,” Emily Landon, who works at recruiting firm The Crypto Recruiters, told DL News.
The crypto industry — much like the rest of the tech scene at large — has implemented mass layoffs over the past year due to volatile markets, aggressive enforcement actions from regulators, a plethora of scandals, plummeting cryptocurrency valuations, skyrocketing interest rates, and venture capital firms tightening their purse strings.
The last quarter of 2022 was particularly brutal for crypto industry workers, with at least 4,000 jobs being lost during that period, according to data on Layoffs.fyi.
Industry layoffs eased up between January and March, falling by 40% compared to the prior three months.
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The totals for each quarter only represent available data on layoffs and are not comprehensive.
The bulk of the layoffs in Q1 came from large, centralised firms, such as US crypto exchange Coinbase which announced it would slash 950 jobs in January, representing about 25% of its workforce.
The announcement represented the crypto giant’s third wave of layoffs over the past year.
Brian Armstrong, CEO of Coinbase, said at the time that a downward market trend and “the fallout from unscrupulous actors in the industry” had forced the company to embark on a massive overhaul to cut costs.
“While it is always painful to part ways with our fellow colleagues, there was no way to reduce our expenses significantly enough, without considering changes to headcount,” Armstrong said in a blog post.
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Similarly, Hong Kong-listed exchange Huobi cut 275 jobs in the first three months of the year, while Digital Currency Group-owned subsidiaries Luno and Genesis laid off 330 and 60 people respectively.
Solana-based NFT marketplace Magic Eden laid off 22 employees, while Polygon slashed 100 employees, 20% of its workforce. Dapper Labs, famous for its NBA Top Shot NFTs, cut 20%.
“There are projects that have struggled, based on the events of CeFi, that are slowly laying people off,” Dan Eskow, founder of crypto recruiting firm Up Top Search, told DL News.
“For example, the Solana ecosystem projects that were affected by FTX? They don’t necessarily feel the effect right away. It takes a minute to trickle down.”
Research and analytics firms haven’t been immune to the crypto winter either. Chainalysis cut 44 jobs in New York, while Elliptic axed 10% of its staff. Crypto research firm Messari slashed 15% of its workforce.
Still, there are bright spots. Zero knowledge rollups and real world assets startups are seeing the biggest growth in hiring, according to Eskow.
RWA protocols and projects have picked up steam this year as the narrative around tokenisation goes mainstream, even among traditional financial institutions.
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There are also signs that traditional finance institutions are moving in to scoop up the talent dispersed by the crypto winter.
Investment giant Fidelity Investments is said to be likely to exceed its target of hiring target of adding another 100 new workers to its digital asset unit.
Elsewhere, Goldman Sachs has said it’s open to both more crypto hires and bargain acquisitions.
While hiring continues, Landon said companies are moving slowly through the interview process.
Engineers continue to be most in demand, followed by business development and marketing hires, Landon said.
