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The collapse of FTX could lead to accelerated layoffs in the crypto sector

The collapse of FTX could lead to accelerated layoffs in the crypto sector

The downfall of the FTX cryptocurrency exchange and potential contagion could lead to accelerating layoffs of crypto companies in the coming months, recruiters warn.

A November 14 report from crypto data aggregator platform CoinGecko states that as of November 13, 2022, 4,695 employees have been laid off in the crypto space, representing a 4% reduction in staff across all “tech start-ups.”

However, the authors of the report warn that layoffs in crypto could increase in the coming months as the “full effect” of FTX’s sudden collapse kicks in:

“With the crash of FTX after November 2nd and its full impact on the cryptocurrency space, there could be further crypto layoffs in the coming months.”

Speaking to Cointelegraph, CryptoRecruit founder Neil Dundon argues that while the FTX events will result in some layoffs, it hasn’t changed the broader trend of cryptocurrency recruitment following cryptocurrency prices.

“Layoffs have been consistent, following the same trend as cryptocurrency prices. FTX has not reversed this broader trend, although it is a tragic event,” he said, adding:

“There will be layoffs because of this, but it will give good projects the opportunity to attract the good talent that we are gathering.”

Kevin Gibson, founder of recruitment firm Proof of Search, was less optimistic, saying he had one candidate who was supposed to start today, but his offer was “rejected” during the company’s first call.

Gibson said it was difficult to comment on the impact of the FTX collapse as the situation is “changing daily” but said his nominee’s experience “won’t be an isolated incident.”

Companies in the crypto sector have already suffered a number of layoffs throughout the year as a result of the market downturn.

Recent industry cuts include layoffs of 1,000 employees at payment processor Stripe, layoffs of blockchain developer Flow Dapper Lab by 22%, and layoffs of venture capital firm Digital Currency Group by 10%. All layoffs took effect at the beginning of November.

Digital asset-focused investment firm Galaxy Digital is also reportedly eyeing a 20 percent cut on Nov. 1.

On November 10, Coinbase laid off another 60 employees, according to Yahoo Finance.

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CoinGecko’s latest report follows an earlier report from Nov. 4 that looks at the cities most affected by the cryptocurrency layoffs.

At the top of the list is San Francisco, home to Silicon Valley, one of the world’s largest hubs for technology and innovation, followed by Dubai, New York and Singapore.