Gemini Exchange Lays Off 10% Of Its Staff, Cites Crypto WinterJune 3, 2022
According to the twins’ blog post, “Gemini would sack 10% of its staff. the company had to decide because of the current conditions in the crypto industry.”
Reasons For The Sacks
It is the first time the American crypto exchange and custodian would take this step. They added that the global macroeconomic and geopolitical situations worldwide have negatively affected the crypto industry. The blog post further said that other crypto firms are also affected.
The latest earnings report by leading us crypto exchange, Coinbase, states that the firm’s revenue is 27% short of last year’s own. It also added that there has also been a similar drop in overall usage within the same period. Last month was a particularly bad one for the crypto industry.
The crypto market cap decreased by more than half a trillion dollars. The sudden collapse of the third largest stablecoin (the TerraUSD) was a major reason for this huge fall in the crypto market cap. Many industry analysts claim that the current market conditions indicate the presence of the crypto winter.
The huge drop in trade volume on crypto exchanges is one reason the analysts cited. The crypto winter is a bear market in the crypto sector; it occurs every couple of years. 2018 was the last time there was a crypto winter. That winter lasted from 2018 to the fall of 2020.
During that time, lots of crypto companies reduced their workforce. The value of digital assets also decreased greatly. A PitchBook data estimates Gemini’s staff to be more than 1,030. Hence, more than 100 of them would no longer have a job going by this announcement.
The company’s latest funding round values the 8-year-old company at a little over $7B. Gemini is yet to release any official statement apart from its co-founders’ blog post. The exchange also said that all of its physical offices will not open today.
Charting The Company’s New Direction
According to the announcement, the move is to ensure its staff’s privacy. The blog post further said that the company would hold a private discussion with any staff affected by the layoff. The discussion will focus on the health care benefits and dismissal packages.
After the affected employees are gone, the company intends to have a new discussion with the staff not affected by the sack. Gemini says its focus will be only on important products that align with its main objectives.
Hence, it will ask team leaders whether they have the right team members in terms of numbers and who can deliver. The company predicts that the current market conditions will likely remain until next year.
Part of the memo the twins sent to the staff reads, “even though today is a rough day, it will make Gemini stronger for the future.” This decision means Gemini joins Robinhood and BitMex crypto exchanges in reducing their staff strength.
Despite these massive staff layoffs, venture capitalists continue to invest huge amounts into the crypto space. In a recent announcement, Andreesen Horowitz stated that it has $4.5B funding for crypto and blockchain projects.
Also, Binance Labs said it has up to $500m through investors and would invest the funds in new web3 projects. Binance Labs is the business arm of the popular crypto exchange, Binance.