- Layoffs in the virtual currency industry slowed down in February compared to a chaotic January.
- Only 570 employees lost their jobs in the cryptoverse compared to the nearly 3,000 terminations in January.
- Industry players are bracing for a rough patch ahead as the crypto winter rages on.
After a tumultuous January, industry players heaved a sigh of relief as layoffs in the cryptoverse slowed from a fiery gallop to a canter.
February has come to an end, and although digital asset prices are swaying in the doldrums, the industry still notched small wins. Recent data shows that during the last month, only 570 employees of virtual currency firms lost their jobs.
The layoffs came from roughly 12 firms, including Polygon Labs, Elliptic, and Messari with the reasons for the layoffs swinging between the need to restructure operations and to save expenses. For Messari, the layoffs affected 15% of staff, with the firm’s founder Ryan Selkis blaming the move on unfavourable market conditions.
On the other hand, Polygon’s co-founder Sandeep Nailwal cited an internal restructuring as the primary reason for his firm’s layoffs, losing 20% of employees. The firm confirmed that the layoffs had little to do with its financial standing as he asserted that its treasury has a healthy balance of $250 million.
Firms like Bittrex, Magic Eden, and FireBlocks blamed the pruning of headcount on a difficult financial standing as a result of declining transaction volumes.
Experts had previously predicted a February marred by multiple layoffs from the abysmal record in January. There were nearly 3,000 terminations in January stemming from layoffs in top digital asset exchanges like Coinbase, Crypto.com, and Huobi.
Despite the progress, there are worries that the U.S. Securities and Exchange Commission (SEC) could trigger more layoffs from its impending crackdown on staking activities.
“Web3 is always going to be hit to a harder degree, at least until Bitcoin decouples from the stock market,” said one pundit. “There may also be some fears of tougher regulations in Web 3 adding to the spike. But as always, crypto is resilient.”
Rough February for broader tech space
Zooming out to the broader tech ecosystem, there appears to be a similar trend with the virtual currency industry, given the reduction month-on-month reduction. According to data from Layofffs.fyi, 24,572 employees across 129 tech firms lost their roles compared to the over 80,000 layoffs in January.
Fears of an extended recession have seen Big Tech firms tighten the strings of their purses as they mull over their next moves. Favourable readings of the Consumer Price Index (CPI) could see the deceleration of the layoffs continue till the end of the second quarter of 2023.