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Crypto Layoffs Declines — Will this Boost Market Recovery?

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By Augustine Mbam - - 5 Mins Read
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Credit: Hunters Race via Unsplash

Crypto layoffs have decreased drastically, generating a lot of excitement in the crypto industry. The number of layoffs recorded in February was more than 50% lower than what was witnessed in January. From credible reports, the crypto industry laid off about 570 employees in February, a vastly contrasting number to the 2,850 employees laid off in January. 

The figures we are putting out were compiled from all the crypto layoffs made public by more than 12 companies in the crypto industry. Within 28 days, the numbers compiled were much lower than in January. One of the things that made the layoffs in January to be very high was because of announcements from crypto companies like Coinbase, Crypto.com, and Huobi. 

Another perceptive to look at the layoffs in January and February was that most of the layoffs in January were at core crypto companies. These layoffs heavily affected crypto companies such as Coinbase, Crypto.com, and Huobi. But the layoffs in February were mostly around companies that are somehow attached to the crypto industry. For instance, many companies affected by the layoffs were mainly blockchain analytics firms, blockchain and software development firms, and digital asset platforms. In other words, they weren't crypto exchanges or trading platforms. 

Crypto analytics firms such as Elliptic and Messar reduced their staff by 10 and 15 percent, respectively. The founder of Messar, Ryan Selkis, tweeted on Feb. 23, announcing that his company will be laying off about 15% of the workers in the company. In his tweet, he said, "Yesterday we made the difficult decision to restructure several of Messari’s internal teams, leading to a 15% staff reduction. We're grateful for the contributions of the teammates we have parted ways with, and will provide resources and connections to help them transition."

"We still plan to hire for a number of open roles and will continue working to bring better transparency & data standards to crypto. Market headwinds (in crypto / tech generally) led to a tough decision. But I'm confident this move will put us on stronger footing long term," he added

Tech Companies Affected as a Result of Recession 

Tech companies, including crypto-affiliated companies like Web3, were hugely affected by layoffs due to the increasing rate of global economic decline. According to Neil Dundon, an Australia-based crypto recruiter, "the spike in layoffs is a macro event not just in Web3 but tech in general fueled by fears of an extended recession." 

Data from layoff tracker Layoffs.fyi showed that more than 24,000 workers within the tech industry were affected by layoffs in February. But looking at the numbers from January showed that there has been a drastic reduction in the numbers. According to their stats, more than 84,000 employees were affected by layoffs in January. 

Layoffs from tech companies 2022 - 2023 (Layoffs.fyi)

"Web3 is always going to be hit to a harder degree, at least until Bitcoin decouples from the stock market. There may also be some fears of tougher regulations in Web3 adding to the spike. But as always, crypto is resilien," Neil Dundon said. Although the numbers are still high, the reduced crypto layoffs might boost market recovery.