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Crypto.com is cutting 20% of its workforce to blunt the blow from FTX’s collapse and the crypto winter, broadening layoffs in the industry

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Matt Damon Crypto.com commercialMatt Damon starred in Crypto.com’s “Fortune favors the brave” ad in 2021.

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  • Crypto exchange Crypto.com said Friday it is cutting 20% of its workforce. 
  • It cut jobs in July 2022 but those didn’t account for the impact of FTX’s collapse months later. 
  • The company’s CEO said the FTX implosion “significantly damaged trust” in the crypto industry. 

Crypto.com said Friday it’s letting go a fifth of its employees as the FTX implosion added a fresh layer of pain to an already slumping cryptocurrency market, with the crypto exchange’s move the latest in headcount reductions in the industry and the wider tech space. 

“Today we made the difficult decision to reduce our global workforce by approximately 20%,” Crypto.com’s co-founder and CEO Kris Marszalek said in a message to employees, excerpts of which were posted on the company’s website. 

Marszalek’s message touched on the company’s layoffs in 2022 which resulted in 260 cuts, or 5% of its workforce.

“The reductions we made last July positioned us to weather the macro economic downturn, but it did not account for the recent collapse of FTX, which significantly damaged trust in the industry,” Marszalek wrote. 

“It’s for this reason, as we continue to focus on prudent financial management, we made the difficult but necessary decision to make additional reductions in order to position the company for long-term success.” 

FTX, the once third-largest crypto exchange, collapsed in November following allegations of misuse of customer funds and a rush of withdrawals. FTX founder Sam Bankman-Fried is currently facing eight criminal charges, and he pleaded not guilty earlier this month.

Crypto.com did not specify how many people worked for the company. Its LinkedIn profile indicated it had just under 4,660 employees. 

Crypto.com’s cronos token was valued at $1.71 billion as Friday. It rose 5% to $0.0677 during the session. But like numerous cryptocurrencies, it’s well off its highs. The token’s price has dropped about 93% from its all-time high reached in November 2021. 

The broader cryptocurrency market also reached a peak valuation in November 2021, at more than $3 trillion. But it has since fallen to about $914 billion during a so-called crypto winter, with pressures including rapid interest-rate hikes by the Federal Reserve and other central banks to tamp down inflation. 

Crypto.com said it “grew ambitiously” at the start of 2022 to align itself with growth in the industry.

“That trajectory changed rapidly with a confluence of negative economic developments,” said Marszalek. 

Crypto.com is part of a wave of layoffs in the crypto industry that accelerated last year. This month alone,  Coinbase said it will let go of another 20% of its staff.  Genesis slashed 30% of its workforce and Blockchain.com has cut 28% of staff. Broadly, CoinDesk estimated more than 28,000 crypto jobs have been lost. 

TrueUp.io, a marketplace for tech jobs, added Crypto.com’s announcement to its counter of layoffs in the broader tech industry. So far in 2023, more than 29,000 people have been laid off. Last year, more than 237,00 people lost their jobs in 1,517 company layoffs.

Crypto.com has more than 70 million users worldwide and is “maintaining a strong balance sheet,” Marszalek said. 

Read the original article on Business Insider
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