• Crypto.com’s CEO announced cutting off 20% of the firm’s workforce.
• According to Kris Marszalek, the decision resulted from worsening economic conditions. 
• In July 2022, the exchange laid off 5% of its workforce, about 260 people. 
• With its move, Crypto.com follows Coinbase in laying off its staff this year.

Crypto.com joined the growing list of firms that have dismissed their employees in 2023. In an announcement by its CEO, Kris Marszalek, on January 13, the exchange resolved to cut off 20% of its workforce.

The CEO said it has already notified all concerned personnel about the development. But he failed to reveal the exchange’s relief plans for impacted employees. However, Marszalek maintained that the dismissal has nothing to do with the performance of the impacted employees.

Crypto.com CEO Justifies Layoff Decision

Kris Marszalek blamed the worsening economic downturns for the tough decision. According to him, the collapse of FTX deteriorated the situation within the sphere and consequently submerged users’ trust in the industry. 

He believes the layoffs were inevitable so that Crypto.com can survive the lingering economic downturns and possible unforeseeable industry events. He insisted that layoffs would not affect the productivity and efficiency of the exchange.

This is not the first time the exchange reduced its workforce amidst the prevailing bear market. In July 2022, the exchange laid off 5% of its workforce, amounting to 260 personnel. 

Justifying the development, Marszalek said the previous layoff failed to foresee or consider the recent FTX contagion. This, according to him, necessitated another staff reduction to allow the exchange to weather the economic condition.

The CEO added that with this development, it is certain that Crypto.com will be repositioned for long-term success, thereby growing beyond its 70 million users and maintaining a good balance sheet.

Crypto.com and Coinbase are on the Same Page

The cryptocurrency exchange joins the likes of Coinbase, which have taken similar steps in the new year. Recall that Coinbase dismissed 20% of its workforce just a few days ago, amounting to about 950 personnel. 

According to its CEO, Brian Armstrong, the layoff would help reduce the operating cost of the firm by 25%, thereby allowing it to forge ahead amidst the uncertainties occasioned by the economic downturn. Like Crypto.com, Coinbase is optimistic that the layoff won’t impact its operational efficiency. 

On the Flipside

• Unlike Crypto.com, Coinbase announced relief packages for affected employees. Notably, the firm plans to pay them a minimum of 14 weeks base pay (two additional weeks per year worked). It also intends to offer health benefits and extra transition support for every affected employee on a work visa.

Why You Should Care

Economists predict a recession in the coming months, so crypto firms are preparing for a turbulent time. Cutting jobs is common for firms to reduce costs and maintain a balanced budget. This is evident from recent layoffs at crypto firms such as Silvergate, Coinbase, and Wyre.