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The crypto industry continues to stagger under a massive wave of layoffs that have been occurring in recent times. Among the recent companies from the sector, Crypto.com has planned on axing 20% of its workforce.
The Singapore-based company, Crypto.com, has confirmed its decision via a blog post. According to Co-Founder and CEO Kris Marszalek, the platform must let go of 20% of its current employees.
Crypto.com has faced significant criticism after attempting to reassure investors that the crypto exchange is in good financial health and has nothing to worry about.
The reason for the layoffs is the current economic headwinds and industry situation. This will be the second major layoff carried out by the company. Crypto.com laid off nearly 260 employees in 2022, accounting for nearly 5% of its workforce.
Crypto.com CEO Kris Marszalek stated:
We grew ambitiously at the start of 2022, building on our incredible momentum and aligning with the trajectory of the broader industry. That trajectory changed rapidly with a confluence of negative economic developments.
The exchange platform has not specifically mentioned the positions that were laid off. The decision to fire employees has been attributed to broader market weakness and the FTX crash. The crash caused a misappropriation of customer funds and eventually bankruptcy, which has gone on to affect the industry considerably.
Crypto.com Says That It Continues To Perform Well
Kriz Marszalek had initially mentioned that the exchange platform maintained adequate reserves for every single coin which the platform held. Two months after that statement, the exchange could not withstand the collapse of FTX without adopting measures to cut costs.
Today we made the difficult decision to reduce our global workforce by approximately 20 per cent. All impacted personnel have already been notified. These reductions were in no way related to performance, and we extend our deepest gratitude for all their contributions to Crypto.com.
He additionally stated:
Several factors played into our decision to reduce headcount. While we continue to perform well, growing to more than 70 million users worldwide and maintaining a strong balance sheet, we’ve had to navigate ongoing economic headwinds and unforeseeable industry events.
Crypto.com Admits To Not Navigating Well After FTX Crash
The Founder of Crypto.com has mentioned that even though Crypto.com was doing well, there has been a change in trajectory with a ‘confluence’ of negative economic developments.
He spoke about the layoffs in July last year as the exchange could not navigate the macroeconomic downturn. It also could not gauge the damage the FTX collapse would have caused to the industry.
The fall of FTX has been terrible for investors’ sentiments. The exchange now wants to focus on making prudent financial decisions to manage the company better, and layoffs are among such necessary measures.
The exchange states that these additional reductions were mandatory to ensure that the company’s position remains profitable in the long term. At the moment, Crypto.com has 2,450 employees, and a 20 percent layoff from that population will mean that close to 490 employees lose their jobs.