Crypto firms lay off hundreds of staff as coin values nosedive

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Amid rising inflation and slowing demand, the value of major cryptocurrencies has plummeted dramatically over the last few days, leading to massive layoffs and hiring freezes at crypto-focused companies.

Cryptocurrency prices have been falling in tandem with a broader market downturn, leaving crypto businesses, lenders, and traders reeling.

According to data portal CoinMarketCap, the value of the cryptocurrency market went below $1 trillion, reaching as low as $926 billion, for the first time since January 2021.

Here are some of the companies that have announced layoffs with the cryptocurrency markets falling:

Coinbase's cofounder and CEO Brian Armstrong announced in a blog post on June 14 that the business will reduce around 18 percent of its personnel.

Armstrong described the reduction as a result of economic conditions and the risk of another "crypto winter" in his blog post. "We grew too quickly," he added.

Also Read: Coinbase CEO Brian Armstrong says the exchange 'over-hired' in 2021

BlockFi, another crypto lending platform, announced on June 13 that it would be laying off around 20 percent of its workforce.

This morning we announced that after taking significant time to plan and consider, we are reducing our headcount by roughly 20%. This is not a decision we take lightly and is one that brings us great sadness.

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— Zac Prince (@BlockFiZac) June 13, 2022

BlockFi’s greatest strength has always been our team, and we have immense gratitude for all who have joined us for this journey. At the end of 2020, we had about 150 employees and since then grew to over 850 during the incredible growth of the crypto markets and our business.

— Zac Prince (@BlockFiZac) June 13, 2022

On the path towards profitability, we have been managing costs throughout our business such as:
- Reducing marketing spend
- Eliminating non-critical vendors
- Reducing executive compensation for myself, Flori and other execs
- Slowing headcount growth and reducing our team size

— Zac Prince (@BlockFiZac) June 13, 2022

Crypto.com announced on June 11 that it would be laying off 5 percent of its workforce, or about 260 people. The changes will allow Crypto.com's CEO Kris Marszalek to "remain focused on executing on our strategy and optimising for profitability while we do so," according to a tweet.

That means making difficult and necessary decisions to ensure continued and sustainable growth for the long term by making targeted reductions of approximately 260 or 5% of our corporate workforce.

— Kris | Crypto.com (@kris) June 11, 2022

Watch: Crypto Crash Decoded | What's bothering Bitcoin and the rest?

The layoffs come at a time when inflation in the United States has climbed to its highest in decades and geopolitical tensions have roiled global markets.

The crypto industry is facing one of its worst days ever as Bitcoin and Ethereum crash nearly 18%. Bitcoin tumbled to an 18-month low under $23,000 on June 13 in a broad cryptocurrency crash. It has now tanked by 66 percent since striking a record peak $68,991.85 last November.

Also, on June 12, cryptocurrency lending platform Celsius Network announced that it was “pausing all withdrawals, Swap, and transfers between accounts”, citing “extreme market conditions”. Celsius, with roughly 1.7 million customers and more than $10 billion in assets, gave no indication in its announcement when it would allow users to access their funds.