Most major exchanges and platforms have announced cost savings amid falling markets

​BitMEX and Galaxy Digital lay off employees. Which companies have already made layoffs and why

02.11.2022 - 07:30

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4 min

What’s new? Amid the bear market and falling rates of most cryptocurrencies, companies continue to cut employees. This week, crypto exchange BitMEX laid off 30% of its employees, investment firm Galaxy Digital announced a 20% staff reduction, and venture capital firm Digital Currency Group announced a 10% reduction.

Reasons for the cuts. A BitMEX spokesperson told The Block that the exchange refused to expand beyond the derivatives market. The strategy involved the opening of spot trading, as well as the provision of brokerage and depository services. The company already cut its staff by a quarter in April, following the collapse of the deal to buy German Bankhaus von der Heydt.

The Block’s material

Galaxy Digital will lay off about 75 employees worldwide. As the company’s spokesman Michael Wursthorn told Bloomberg that the decision was made as part of a team optimization due to macroeconomic issues. Galaxy posted a net loss of $554,7 million in Q2, an increase of more than 3 times over the year.

Bloomberg’s material

In a comment to Bloomberg, a Digital Currency Group spokesperson explained that the purpose of the cuts is to streamline in order to prepare for the “next phase of growth.” One of the companies in the Digital Currency Group is the biggest creditor of the bankrupt hedge fund Three Arrows Capital. It accounts for 67% of 3AC’s $3,5 billion in debt.

Bloomberg’s material

What other companies have been affected by the market crash? In October, institutional crypto platform New York Digital Investment Group (NYDIG) cut about 100 employees (~30% of its staff). In the same month, crypto exchange Crypto.com laid off more than 2000 employees, cutting its staff by about 40%. A company spokesman explained that this decision was made as part of a restructuring process aimed at “strengthening the position during a bear market cycle.” He noted that 60% of the laid-off employees were freelancers.

In July, crypto exchange CoinFLEX laid off part of its employees from various departments around the world in order to optimize costs. Representatives of the platform noted that cutting staff and non-staff costs will reduce the company’s costs by about 50-60%. The BlockFi lending platform also announced the second round of layoffs a month after cutting staff by 20% to bring the company in line with market conditions. In the same month, crypto exchange Gemini laid off another 7% or (68 employees) a month and a half after cutting 10% of its staff due to “extreme cost cutting.”

In June, the Bitpanda platform cut more than 70% of its staff (~730 people) amid the downturn in the market. Crypto exchange Coinbase also cut about 18% of its staff to reduce costs amid the coming crypto winter. The company developed several programs to minimize the impact on downsized employees.

In contrast, Binance, the world’s largest crypto exchange in terms of trading volumes, opened about 2000 jobs amid a wave of layoffs in July. The platform also planned new mergers and acquisitions (M&A). Changpeng Zhao, the head of the company, said that Binance intends to make the most of crypto winter. He also noted that the exchange has a solid reserve that would allow it to survive this period.

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