FTX Fall Could Lead to More Layoffs In the Crypto Space

Key Insights

• FTX collapse could accelerate layoffs in the crypto sector
• The month of November has seen massive layoffs in the crypto and tech ecosystem
• In recent times, Meta, Stripe, and Dapper Lab are some of the tech companies that have undergone layoffs

The FTX collapse is the major highlight of events in the cryptocurrency and tech ecosystem. The exchange had to file for bankruptcy leading to major investors pulling out their funds— and the unfortunate attack leading to a loss of over $400 million. 

Since then, a lot has happened, ranging from the crash in assets’ price value to a loss of confidence among investors, etc. The latest happening on our radar since the FTX collapse is the imminent layoffs in the crypto sector. 

FTX Collapse Could Accelerate Crypto Sector Layoffs

Since the FTX collapse last week, several data aggregator platforms have been rolling out the effect. 

CoinGecko, a data aggregator platform, released a report on the 14th of November.  The report revealed that as of November 13, about 4,695 employees lost their jobs in the crypto sector. This number shows about 4% of staff cut across all crypto and tech startups. 

Similarly, the founder of CryptoRecruit, Neil Dundon, acknowledged that the FTX events would accelerate more layoffs. In Trent_Titan’s tweet, he likened the FTX collapse to the 2008 Lehman Brothers crisis. 

Why FTX's Collapse Is The Crypto Equivalent Of The 2008 Lehman Brothers Crisis – Benzinga Pro #FTX pic.twitter.com/990u5voDN9

— Titan Trades | Options Trading Discord (@Trent_Titan) November 13, 2022

However, he said it hadn’t changed the broader trend that crypto recruitment would follow after that. 

Neil Dundon said,

“There will be layoffs because of the FTX incident— but that will present opportunities for good projects to scoop up good talent.” 

Furthermore, Proof of Search founder Kevin Gibson identifies the negative impact of the FTX incidence and the crypto winter. He identified the negative impact on the crypto sector job opportunities.

In an instance sighted by Kevin Gibson, he mentioned a candidate scheduled to start work today. However, during his first call to the company, the offer was “pulled.” Therefore, he would have to search for jobs elsewhere. 

You would recall that several companies in the crypto and tech sector have undergone layoffs in recent times. For instance, Stripe, a payment processor, has sacked about 1,000 employees. Meta, the parent developer of Facebook and WhatsApp, announced the layoff of about 11,000 workers.

Similarly, Dapper Lab, a flow blockchain developer, has reduced its workforce by 22%. Digital Currency Groups, a venture capital firm, announced a 10% layoff. 

All these layoffs took effect in November and were attributed to the bear market. Coincidentally, the FTX collapse occurs mid-November. 

Conclusion 

Layoffs in the crypto ecosystem started when the price value of assets began to decline. Coincidentally, experts strongly believe the FTX collapse will have a negative impact on the jobs in the ecosystem. 

However, the full impact of the FTX crash is unknown, with events expected to unfold in the coming days. Industry players opine that aside from the layoff, every actor in the industry will feel the impact of the FTX collapse.