BlockFi announced in a blog post Tuesday that it is letting go of a sizable number of staff: 20 percent of its total headcount, or around 170 to 200 employees.
Zac Prince, the CEO of the crypto trading and lending platform, tweeted that the job cuts can be traced to a “dramatic change in macroeconomic conditions” and BlockFi’s efforts to regain profitability.
The post from the co-founders of Blockfi, Prince and Flori Marquez, follows a string of well-known crypto companies decreasing employee numbers because of the ongoing chaos happening in the bear market.
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Peter Thiel, a venture capitalist, has backed BlockFi’s explosive growth in recent years, which has been fueled by low borrowing costs and the spike in cryptocurrency values. Prior to the disclosure of the most recent personnel layoffs, BlockFi’s workforce increased from 150 in the end of 2020 to over 850.
BlockFi and Crypto.com are undergoing major cutbacks in their workforce. Source: CoinMarketCap
BlockFi, Crypto.com Crack Under Pressure
It is not the only crypto startup to reduce its workforce. According to a Twitter thread by its CEO, Kris Marszalek, Crypto.com stated on Friday that it is terminating the contracts of roughly 260 employees.
Marszalek tweeted on Friday that the company made “tough and necessary decisions” to maximize profitability and long-term growth at a period of market turmoil.
BlockFi reportedly raised more than $957 million since its 2017 start and aimed for a valuation of approximately $5 billion in 2018.
The layoffs are yet another sign of problems for the once-dominant crypto space. Celsius has recently halted all account withdrawals and transactions, citing “extreme market conditions.” The crypto lending company has lent clients more than $8 billion, making it one of the largest players in the crypto lending sector.
Crypto total market cap at $934 billion on the daily chart | Source: TradingView.com
Crypto Market Turmoil Forcing Companies To Cut Jobs
Gemini Trust, a cryptocurrency exchange, announced earlier this month that it intends to cut 10 percent of its personnel, while Coinbase Global reported it is rescinding employment offers and ceasing its hiring drive. And only recently, both Bitso and Buenbit announced layoffs and cut their staffing levels.
The crypto economy fell below the $1 trillion mark on Monday, as the whole crypto business dropped nearly 15 percent of its worth in U.S. dollars in the preceding day.
Bitcoin, the most sought-after crypto asset in the world, sank to a low of $22,600 on Monday, while a multitude of alternative digital currencies also declined. In the aftermath of the crypto economy’s bear market turbulence over the past two weeks, digital currency companies have been laying off employees.
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Featured image from News Text Area chart from TradingView.com