FTX Collapse Might Increase Layoffs in Cryptocurrency Sector

• by Artem
• |
• November 16, 2022
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• Cryptocurrency News

Recruitment experts warn that the collapse of crypto exchange FTX and any subsequent infirmity may increase layoffs at crypto businesses in the upcoming months. A study released on November 14 by cryptocurrency data aggregator CoinGecko showed that 4,695 people had already lost their jobs in the crypto industry by November 13. This figure represents 4% of layoffs across all “technology startups.”

However, the report’s authors warn that the “full impact” of FTX’s abrupt fall may accelerate layoffs in the cryptocurrency industry in the upcoming months. Neil Dundon, the creator of CryptoRecruit, told the media that although FTX’s activities would lead to certain layoffs, the general pattern that crypto recruiting follows crypto pricing hasn’t altered.

“Layoffs have been consistent effectively following the same trend as crypto prices. FTX hasn’t changed that broader trend albeit a tragic event,” he said. 

The founder of the recruiting agency Proof of Search, Kevin Gibson, was less upbeat. He said that one of his candidates had his offer “pulled” during the initial contact with the employer. According to Gibson, the FTX collapse is “changing daily,” making it difficult to predict how it will play out. He further said that the experience of his candidate “will not be an isolated incident.”

Businesses in the crypto industry have already made a number of layoffs this year due to the market slump. Among the most recent personnel reductions in the sector include 1,000 layoffs at payment processor Stripe, a 22% reduction at blockchain developer Dapper Lab, and a 10% decrease at venture capital company Digital Currency Group. Early in November, all layoffs became effective.

Galaxy Digital, an investment business that specializes in digital assets, was also said to be considering a 20% cut on November 1. Yahoo Finance disclosed that Coinbase reportedly let go another 60 employees. The last CoinGecko analysis, published on November 4, evaluated the cities where layoffs in the crypto industry were most prevalent. San Francisco, home to Silicon Valley, came in first, followed by Dubai, New York City, and Singapore.