FTX Crash May Increase Crypto Sector Layoffs – Reports

FTX crypto exchange crash and potential resulting contagion could lead to an increase in crypto-company layoffs in the coming months, according to recruitment experts,

iexclusivenews reports that according to a Nov. 14 report from crypto data aggregator platform CoinGecko, as of Nov. 13. The crypto space has seen 4,695 employees let go in 2022, accounting for 4% of all “technology startups.”

However, this online news outlet the report’s authors warn that cryptocurrency layoffs may increase 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.”

According to CryptoRecruit founder Neil Dundon, while the events at FTX will result in 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 recruitment firm Proof of Search was less optimistic, sharing that he had one candidate that was due to start employment today but had his offer “pulled” during the first call with the company.

Gibson said it’s difficult to predict how the FTX collapse will play out because it’s “changing daily,” but his candidate’s experience “will not be an isolated incident.”

As a result of the market downturn, companies in the crypto sector have already laid off a number of employees this year.

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Among the most recent industry layoffs are payment processor Stripe’s 1,000 employee layoff, Flow blockchain developer Dapper Lab’s 22% cut, and venture capital firm Digital Currency Group’s 10% layoff. All layoffs were implemented in early November.

Galaxy Digital, a digital asset-focused investment firm, was also reported to be planning a 20% cut on November 1.

According to Yahoo Finance, Coinbase cut another 60 employees on November 10.

The latest CoinGecko report comes on the heels of an earlier report on November 4 that looked into the cities most affected by cryptocurrency layoffs.

San Francisco, home to Silicon Valley, one of the world’s largest technology and innovation hubs, topped the list, followed by Dubai, New York City, and Singapore.