- FTX Collapse Leads to Further Job Cuts at Crypto.com
- Crypto.com Struggles to Weather Economic Downturn and Industry Events
- Crypto Exchange Crypto.com Lays Off 490 Employees Amid Industry Turmoil
Crypto.com, the Singapore-based crypto exchange, has announced cutting its global workforce by 20%. This is the second major layoff for the company, which cut 250 jobs in the middle of last year. However, it is reported that more than 2,000 people were either let go or left the company at their own will. The company did not disclose which roles were being eliminated in this new round of layoffs but blamed the collapse of FTX for the decision.
In a blog post, Marszalek said, “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 downturn in the broader market has hit the crypto industry hard, which has reversed much of the gains from the 13-year bull run. Other crypto companies have also been forced to make significant decisions to survive the downturn. Coinbase cut about 20% of its workforce earlier this week in its second round of significant layoffs. Kraken said in November that it plans to lay off 1,100 people, or 30% of its workforce.
Crypto.com had a challenging year in 2022. The company received criticism for its cringy/overly enthusiastic Matt Damon ad, accidentally sent an Australian customer more than $10 million in a snafu, and grappled with industry concerns over its financial health performance. The company received a vote of confidence from auditing firm Mazars, which said Crypto.com users’ crypto assets were fully backed one-to-one. But days later, Mazars also audited Binance and said it had paused its work with crypto clients.
Despite these challenges, Marszalek remains optimistic about the future of the company. He said, “The reductions we made last July positioned us to weather the macroeconomic downturn, but it did not account for the recent collapse of FTX, which significantly damaged trust in the industry. For this reason, as we continue to focus on prudent financial management, we made the difficult but necessary decision to make additional reductions to position the company for long-term success.”
Crypto.com was also one of the main sponsors for the recent World Cup tournament, which promoted the platform to a global audience of five billion viewers. The exchange has been one of the most active companies in the world in terms of promoting to sports fans, with the firm running several ads during the Super Bowl and purchasing the naming rights to the multipurpose arena in downtown Los Angeles that was formerly known as the Staple Center for $700 million.
Startups are hard … but there is no better way to live: Marszalek
Crypto.com has 2,450 employees, according to PitchBook data, suggesting around 490 were laid off. A Crypto.com representative was not immediately available to comment.
Crypto exchanges and lenders have been forced to pare back headcount aggressively, a move accelerated by the FTX collapse and the next wave of crises. Marszalek said the reduction was part of Crypto.com’s continued focus on “prudent financial management.”
Like FTX, Crypto.com entered into high-profile promotion deals and sponsorships, signing an eye-popping naming deal for the former Staples Center in 2021 valued at $700 million over 20 years.
“We have a significant year ahead of us as we continue to help restore trust in our industry,” Marszalek wrote. Marszalek founded Singapore-based Crypto.com in 2016, overseeing a company that reportedly reached at least $1.2 billion in revenue by 2021.
CNBC reported on some of Marszalek’s business successes and failures in December. At the time, Marszalek dismissed concerns about Crypto.com’s stability.
Conclusion
The crypto industry has been hit hard by the downturn in the broader market, and companies have been forced to make significant decisions to survive the downturn. The company is still promoting and trying to build trust among its customers and users, but it has been a tough year with multiple gaffes and adverse events.
