Layoffs in the crypto industry appear to have significantly decreased in the past month, with around 570 crypto employees laid off in February, down from an estimated 2,850 in January.
Cointelegraph compiled the numbers based on publicly reported layoffs and found that the job cuts were spread across at least 12 companies over the 28-day period, but noticeably missed the triple-digit layoffs on cryptocurrency exchanges compiled in January, such as those from Coinbase, Crypto.com and Huobi.
Instead, staff cuts have reached double digits for the most part — impacting blockchain analytics firms, software and blockchain development firms, and digital asset platforms, among others.
The most recent layoffs came from crypto analytics firms Elliptic and Messari, which cut 10% and 15% of staff respectively.
Messari founder Ryan Selkis tweeted on Feb. 23 that the staff cuts were due to “market headwinds” and a restructuring of its internal teams. It is estimated that it impacted around 27 employees.
1/ Yesterday we took the difficult decision to restructure several of Messari’s internal teams, leading to a 15% headcount reduction.
We are grateful for the contributions of the teammates we parted ways with and will provide resources and connections to help them through the transition.
— Ryan Selkis (@twobitidiot) February 23, 2023
Meanwhile, an Elliptic spokesperson told DLNews on Feb. 24 that the decision to lay off 20 employees was a move to reduce operating expenses.
This follows news from earlier in the month, when Chainalysis, another blockchain analytics firm, revealed that it had laid off 44 of its 900 employees, representing 4.8% of its workforce “mostly in sales”.
Neil Dundon, an Australia-based crypto recruiter, told Cointelegraph that “the surge in layoffs is a macro event not just in Web3, but technology in general, fueled by fears of a prolonged recession.”
Data from layoffs tracker Layoffs.fyi revealed that there were a total of 24,572 employees laid off at 129 tech companies in February, down from 84,414 at 268 tech companies in January.
“Web3 will always be hit to a harder degree, at least until Bitcoin decouples from the stock market. There may also be some fears of tighter web3 regulations increasing the spike. But, as always, cryptocurrency is resilient.”
At the highest end of layoffs for the month, non-fungible token (NFT) company Dapper Labs and Ethereum scale platform Polygon Labs laid off around 20% of staff as a result of internal restructuring.
A big part of that strategy includes unifying all of our teams across Polygon Labs to drive further growth.
As part of this consolidation process, we made the difficult decision to reduce our staff by 20%, impacting several teams and around 100 positions.
— Sandeep | Top 3 polygon by impact (@sandeepnailwal) February 21, 2023
In a February 21 Twitter post, Polygon co-founder Sandeep Nailwal explained the move was a result of merging all of its internal teams into Polygon Labs, leading to the cut of 100 jobs.
On February 23, Dapper Labs CEO Roham Gharegozlou confirmed another round of layoffs at his company after a first wave in November, noting it was part of the restructuring “to improve our focus and efficiency”.
Immutable, the Australian company behind another Ethereum layer 2 blockchain protocol, also cut staff during the month, reducing headcount by 11%.
Other companies that announced headcount reductions included crypto exchange Bittrex, NFT marketplace Magic Eden, institutional crypto custodian Fireblocks, software company Protocol Labs and crypto media company The Block.
Payments firm Affirm announced it was ending its crypto program for the month amid a 19% staff cut, although it is unknown how many employees at its crypto unit were laid off as a result.
Related: Crypto recruiting execs reveal the safest jobs amid layoff season
Kevin Gibson, founder of blockchain recruiting firm Proof of Search, agreed that the pace of layoffs appears to have slowed compared to January.
“Jan was big because it followed the boards (and venture capital) looking (at) the 2022 results and preparing for the worst,” he said. “We saw fewer candidates fired this month.”
“Companies are still building great products and the current teams are really stretched so more layoffs would reduce muscle right now for a lot of companies.”
Gibson, however, warns that the US securities regulator could “cause more pain” while press coverage of Sam Bankman-Fried and the FTX collapse “is having an effect on public perception of the industry and popular adoption”.