Singapore-based digital asset services provider (DASP) CryptoCom is conducting another round of layoffs after sacking 260 employees last year. The company announced Friday that it had reduced around 20% of its global workforce, citing ongoing economic headwinds and unforeseeable market events.
The latest development comes at a time when the industry is reeling from the collapse of the Sam Bankman-Fried crypto exchange FTX, valued at around $32 billion before its sudden demise in November.
Not Influenced by FTX Collapse
While CryptoCom did not disclose any exposure to the beleaguered exchange, other companies such as Ikigai, BlockFi, and the Canadian investment fund, Ontario Teachers Pension Plan (OTTP), were among the many firms caught up with the FTX drama.
CryptoCom’s CEO Kris Marszalek said in an open letter addressed to the affected employees that the decision to downsize the exchange’s global headcount was not influenced by performance, noting that the firm performed well at the beginning of 2022 before the bear market changed its momentum.
“We grew ambitiously at the start of 2022, building on our incredible momentum and aligning with the trajectory of the broader industry. That trajectory changed rapidly with a confluence of negative economic developments,” said Marszalek.
Weather Market Storm
Marszalek further stated that the exchange’s first reduction, conducted last July, prepared it to weather the market storm. However, it did not account for the collapse of FTX, which significantly impacted the entire crypto industry, hence the new slash.
“It’s for this reason, as we continue to focus on prudent financial management, we have made the difficult but necessary decision to make additional reductions to position the company for the long-term,” the CEO said.
The CryptoCom boss believes the firm will thrive in 2023 and will help restore trust in the industry.
Coinbase and BlockchainCom Join Second Wave of Layoffs
As with other financial sectors, the crypto industry had a rough 2022, ranging from the fall of Terra (LUNA) blockchain and the recent FTX saga leading to many companies reducing their headcounts to stay afloat.
On January 10, 2023, crypto exchange Coinbase disclosed its plans to eliminate 950 employees from the firm to improve its finances and to enable it to maintain operational costs. Like CryptoCom, the exchange laid off a significant percentage of its workforce last year.
That same week, crypto brokerage firm BlockchainCom followed in Coinbase’s footsteps after its first round of layoffs in 2022. The company said it would downsize its workforce by 28% due to the deepening bear market.
