While the full impact of FTX’s collapse is still unfolding, some have already warned of an increase in layoffs to come “in the months to follow.”
Falling cryptocurrency exchange FTX may lead to an increase in layoffs of crypto companies in the near future, recruitment specialists say.
As of November 13, 2022, 4,695 employees had been let go from technology startups throughout the crypto space. This represents 4% of all staff cuts across all startups in the technology industry.
The authors of the report say that there could be more layoffs in the crypto industry in the coming months as the “full impact” of FTX’s sudden collapse takes effect.
“With the collapse of FTX since November 2 and its full impact on the cryptocurrency space still unfolding, further cryptocurrency layoffs may occur in the months to follow.”
Speaking to Cointelegraph, Neil Dundon of CryptoRecruit argues that while FTX’s events may cause some layoffs, it hasn’t changed the broader trend that crypto recruitment follows crypto prices.
“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, adding:
“There will be layoffs because of it but that will present opportunities for good projects to scoop up good talent which we are collecting.”
Kevin Gibson, the founder of Proof of Search, shared that he had one candidate who was due to start employment today, but their offer was “pulled” during their first call with the company.
Gibson said it was hard to comment on how the FTX collapse will shake out as it’s “changing daily” but said his candidate’s experience “will not be an isolated incident.”
Many companies in the crypto sector have already laid off employees in response to the downturn in the market.
Recently, there have been staff reductions in the industry, including the layoffs of 1,000 employees from payment processor Stripe, 22% cuts by Flow blockchain developer Dapper Lab, and 10% layoffs by venture capital firm Digital Currency Group. All layoffs took place in early November.
Digital asset investment firm Galaxy Digital is said to be planning to reduce its prices by 20% on November 1.
Coinbase is understood to have cut another 60 staff on Nov. 10, according to Yahoo Finance.
The latest CoinGecko report looks at the cities most impacted by job layoffs in the cryptocurrency industry.
At the top of the list was San Francisco, which is home to Silicon Valley, one of the world’s largest technology and innovation hubs. Dubai, New York City and Singapore followed.
