<p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun CommentStart SCXW176596984 BCX0">The crypto industry is no stranger to rapid growth, precipitous declines and all the volatility in-between, but executives and employees alike are facing some bitter pills to swallow as they search for any kind of upside in the wake of the latest bust cycle that now has thousands dusting off their resumes. </span></span></p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">“Firms grew much too quickly during the 2021 bull market that in large part turned out to be a Ponzi scheme,” Gartner Research Senior Analyst Avivah Litan said, adding that the currently depressed market</span><span class="NormalTextRun SCXW176596984 BCX0"> could mean that</span><span class="NormalTextRun SCXW176596984 BCX0"> “m</span></span><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">any ... talented employees will find it difficult to land a new job deserving of their skills.”</span></span></p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">Not counting the jobs which evaporated amid the destruction of </span><span class="NormalTextRun SpellingErrorV2Themed SCXW176596984 BCX0">TerraUSD</span><span class="NormalTextRun SCXW176596984 BCX0">, Voyager Digital, </span><span class="NormalTextRun SpellingErrorV2Themed SCXW176596984 BCX0">BlockFi</span><span class="NormalTextRun SCXW176596984 BCX0"> and FTX, many organizations </span></span>including companies like <a href="https://www.theblock.co/post/192502/amber-group-says-its-business-as-usual-amid-reports-of-more-layoffs">Amber Group</a>, <a href="https://www.theblock.co/post/191023/kraken-cuts-30-of-staff-to-weather-crypto-winter">Kraken</a> and <a href="https://www.theblock.co/post/190479/candy-digital-nft-shop-lays-off-large-number-of-employees-amid-market-deterioration">Candy Digital</a> said goodbye to roughly a third of their employees in 2022. Easy money and a banner year in 2021 that saw the <span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">total market surpass $3 trillion</span><span class="NormalTextRun SCXW176596984 BCX0"> may have simply pushed some to move too fast and won't likely be repeated again anytime soon. </span></span></p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">“The influx of investor cash encouraged the scaling,” said John Paller, the top executive at </span></span><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun SpellingErrorV2Themed SCXW176596984 BCX0">Opolis</span></span><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">, an employment platform for independent workers. He said that </span><span class="NormalTextRun SCXW176596984 BCX0">the </span><span class="NormalTextRun CommentStart SCXW176596984 BCX0">flood of fresh investment had been spurred by “mostly hype and memes.”</span></span></p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">Dozens of companies ramped up hiring in order to meet the demands of a new crop of customers. In many cases, companies more than doubled their headcount in a matter of months, </span><span class="NormalTextRun SpellingErrorV2Themed SCXW176596984 BCX0">over-hiring</span><span class="NormalTextRun SCXW176596984 BCX0"> as low interest rates facilitated cheap borrowing. It didn't last long.</span></span></p> <h2>Bull market goes bust</h2> <p><span lang="EN-US" xml:lang="EN-US" data-contrast="none">“It's really the first big cycle we've seen in the crypto space,” said Denise Carlin, a recruitment executive at technology firm MPCH Labs.</span></p> <p><span lang="EN-US" xml:lang="EN-US" data-contrast="none">But as the bearish market reared its ugly head, prices plummeted, and a string of bankruptcy announcements grabbed headlines, the layoffs were swift and many. Suddenly, tens of thousands were polishing their resumes and </span><span lang="EN-US" xml:lang="EN-US" data-contrast="none">looking for a new job.</span><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0"><br /> </span></span><span class="LineBreakBlob BlobObject DragDrop SCXW176596984 BCX0"><span class="SCXW176596984 BCX0"><br /> <img class="alignnone wp-image-196375 size-full" src="https://www.tbstat.com/wp/uploads/2022/12/2022-layoffs-scaled.jpg" alt="" width="2560" height="1883" /></span><br class="SCXW176596984 BCX0" /> </span><span class="LineBreakBlob BlobObject DragDrop SCXW176596984 BCX0"><span class="SCXW176596984 BCX0"> </span><br class="SCXW176596984 BCX0" /> </span></p> <h2>Oops... we over-hired!</h2> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">The risk of growing too quickly had been easily overlooked considering the scope of the bull run. But by year’s end some top executives were quick to capitulate. </span></span></p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">“We </span><span class="NormalTextRun SpellingErrorV2Themed SCXW176596984 BCX0">over-hired</span><span class="NormalTextRun SCXW176596984 BCX0"> in 2021,” said Coinbase CEO Brian Armstrong <a href="https://a16z.simplecast.com/episodes/ben-horowitz-and-brian-armstrong-on-building-and-overcoming-the-hard-things">on a podcast</a> in early December. “I got caught up in it as well. I was like ‘Okay, we have a huge line of customers out the door [and] we can’t even onboard them fast enough.’” </span></span></p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">Coinbase laid off more than 1,100 people in 2022. While it's unclear what percentage of total employees that is, Coinbase currently has about 5,900 employees according to LinkedIn.</span></span></p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">Layoffs </span><span class="NormalTextRun SpellingErrorV2Themed SCXW176596984 BCX0">en</span><span class="NormalTextRun SCXW176596984 BCX0"> masse </span><span class="NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW176596984 BCX0">was</span><span class="NormalTextRun SCXW176596984 BCX0"> not isolated </span><span class="NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW176596984 BCX0">to</span><span class="NormalTextRun SCXW176596984 BCX0"> crypto. With rising inflation, higher interest rates and soaring debt, some of the world’s most-established tech companies also significantly reduced their headcount. Amazon and Meta each cut more than 10,000 jobs. Cisco and Twitter also let thousands of employees go. </span></span></p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun CommentStart SCXW176596984 BCX0">A</span><span class="NormalTextRun SCXW176596984 BCX0">mid the frothy optimism of 2021 and early 2022, crypto executives </span><span class="NormalTextRun SCXW176596984 BCX0">faced real</span><span class="NormalTextRun SCXW176596984 BCX0"> tempt</span><span class="NormalTextRun SCXW176596984 BCX0">ation, and choosing to be overly pragmatic posed a risk</span><span class="NormalTextRun SCXW176596984 BCX0">, said Rob Paone, a recruiter who specializes in the crypto space as founder of Proof of Talent.</span></span><span class="LineBreakBlob BlobObject DragDrop SCXW176596984 BCX0"><br class="SCXW176596984 BCX0" /> </span></p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">Trading platforms, according to Paone, </span><span class="NormalTextRun SCXW176596984 BCX0">were</span><span class="NormalTextRun SCXW176596984 BCX0"> forced to decide between hiring enough people to meet the surge in demand and serve a swelling customer base or grow frugally, hire conservatively and risk losing out to bolder competitors.</span></span></p> <h2>Headcount and debt</h2> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">At least one crypto executive believes some companies brought in a large number of new hires for other reasons, as higher headcount numbers allowed firms to seek out and justify larger amounts of fresh capital.</span></span></p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">“A few among them almost certainly used unnecessary hiring to acquire debt, giving them more cash on hand,” said Michael Wilson, president and COO of 1GCX, a cryptocurrency and tokenized carbon credit exchange. “Now, those companies don’t have the employees, but they still have the capital.”</span></span><span class="LineBreakBlob BlobObject DragDrop SCXW176596984 BCX0"><span class="SCXW176596984 BCX0"> </span></span></p> <p><span lang="EN-US" xml:lang="EN-US" data-contrast="none">The dangers of taking on excess debt by growing too fast and hiring too many people is hardly a new phenomenon. The 21</span><span lang="EN-US" xml:lang="EN-US" data-contrast="none">st</span><span lang="EN-US" xml:lang="EN-US" data-contrast="none"> century is riddled with once promising tech companies that flamed out. </span> <br /> <br /> <span lang="EN-US" xml:lang="EN-US" data-contrast="none">Several years ago, Jessica Livingston, a partner at Y Combinator, said that after seeing more than one thousand startups pass through her Silicon Valley venture capital firm, <a href="https://www.ycombinator.com/library/5l-how-not-to-fail">she observed</a> that staffing too quickly often turned into a poison pill. </span> </p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">“I constantly see startups that die even though they're on the right track,” she said. “Simply because they hired too fast.”</span></span></p> <h2>The search for a silver lining</h2> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">Many true believers believe the current crypto winter will serve to separate the wheat from the chaff, and the industry will emerge stronger and perhaps more resilient to future down cycles, partly because crypto </span><span class="NormalTextRun SCXW176596984 BCX0">has evolved into so much more than a collection of digital currencies.</span><span class="NormalTextRun SCXW176596984 BCX0"> </span><span class="NormalTextRun AdvancedProofingIssueV2Themed SCXW176596984 BCX0">In particular, </span><span class="NormalTextRun AdvancedProofingIssueV2Themed SCXW176596984 BCX0">the </span><span class="NormalTextRun SCXW176596984 BCX0">growing number of use cases</span> for NFTs <span class="NormalTextRun SCXW176596984 BCX0">combined with a major push to bring</span> <span class="NormalTextRun SCXW176596984 BCX0">web3 </span><span class="NormalTextRun SCXW176596984 BCX0">video </span><span class="NormalTextRun SCXW176596984 BCX0">gam</span><span class="NormalTextRun SCXW176596984 BCX0">es</span> <span class="NormalTextRun SCXW176596984 BCX0">to market </span><span class="NormalTextRun SCXW176596984 BCX0">has helped the </span><span class="NormalTextRun SpellingErrorV2Themed SCXW176596984 BCX0">cryptoverse</span><span class="NormalTextRun SCXW176596984 BCX0"> add depth.</span></span></p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">The diversification gives </span><span class="NormalTextRun SCXW176596984 BCX0">Paone ho</span><span class="NormalTextRun SCXW176596984 BCX0">pe for the future job </span><span class="NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW176596984 BCX0">market,</span><span class="NormalTextRun SCXW176596984 BCX0"> and he’s noticed</span><span class="NormalTextRun SCXW176596984 BCX0"> there are </span><span class="NormalTextRun SCXW176596984 BCX0">currently many</span><span class="NormalTextRun SCXW176596984 BCX0"> smaller startups keen to hire.</span><span class="NormalTextRun SCXW176596984 BCX0"> Job seekers, meanwhile, generally appear to be eager to stay in crypto, he also said.</span></span><span class="LineBreakBlob BlobObject DragDrop SCXW176596984 BCX0"><span class="SCXW176596984 BCX0"> </span></span></p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">But</span><span class="NormalTextRun SCXW176596984 BCX0"> he admi</span><span class="NormalTextRun SCXW176596984 BCX0">ts the road ahead could be a difficult one and </span><span class="NormalTextRun SCXW176596984 BCX0">possibly </span><span class="NormalTextRun SCXW176596984 BCX0">not for the faint of heart. </span></span><span class="LineBreakBlob BlobObject DragDrop SCXW176596984 BCX0"><span class="SCXW176596984 BCX0"> </span></span></p> <p><span class="TextRun SCXW176596984 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="none"><span class="NormalTextRun SCXW176596984 BCX0">“We’ve seen </span><span class="NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW176596984 BCX0">these big boom</span><span class="NormalTextRun SCXW176596984 BCX0"> and bust cycles [before],” said Paone. “Part of me just thinks that’s the way crypto works, and you kind of have to live with it and survive through it.”</span></span></p><br /><span class="copyright"><p>© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.</p> </span>