Snap Inc, 2TM and Rain announced job cuts over the last week, joining a long list of crypto firms cutting back amid the ongoing crypto winter.
Torrid times continue for the crypto industry, as Snap Inc, 2TM and Rain announced job cuts over the past week. They join a long list of crypto firms cutting back amid the current crypto winter, with data from Moneyweb suggesting that over 5,000 individuals within the industry have lost their jobs since April 2022. However, despite all the slashes, crypto experts and recent funding numbers provide an optimistic outlook for the nascent industry.
The latest firm to join the downsizing bandwagon was 2TM, the parent company of the Brazilian crypto exchange Mercado Bitcoin. The Softbank-backed organization plans to lay off nearly 15 percent of its workforce, resulting in roughly 100 job losses. This is the company’s second round of job cuts; 2TM had dismissed more than 10 percent of its workforce (about 90 employees) at the start of June.
Prior to 2TM, Rain Financial, one of the largest crypto exchanges in the Middle East, also announced job cuts. According to sources, the firm has let go of hundreds of employees, citing “operational needs and market conditions” as the main reasons for the move. Like 2TM, this is Rain’s second round of job cuts; the Coinbase-backed company slashed dozens of employees back in June as well.
While 2TM and Rain have only trimmed their workforce, Snap Inc (Snapchat’s parent concern) has shut down its entire Web3 wing. The move is part of the company’s restructuring effort that will leave 20 percent of its workforce (nearly 6,500 individuals) without a job, according to a report by the Verge.
“As a result of a company restructure, decisions were made to sunset our Web3 team. The same team I co-founded last year with other pirates who believed in digital ownership and the role that AR can play to support that,” said Jake Sheinman , Snap Inc’s Web3 Program Manager, in a tweet.
Crypto.com is also believed to have laid off several employees in August, its second round of job cuts this year. Earlier in June, the crypto giant let go of 5 percent of its workforce, roughly 260 people. While details about the recent job slash have not been released, it is estimated to be worse than the previous cut, according to a report by Decrypt.
Despite all these job losses, experts and recruiters within the space say that the digital asset job market is still growing. “There is still a great deal of demand,” said Kevin Gibson, founder of crypto recruiting firm Proof of Search, while speaking to CoinTelegraph. He explained that the crypto market is “lacking experienced CTOs, CMOs, and token experts” and that “GameFi, Metaverse, decentralized finance and NFT-oriented companies” are actively looking to onboard new talent.
Proof of this comes from the fact that several traditional finance veterans are jumping over to the crypto industry, despite the current crypto winter. “I believe in the long-term opportunity of crypto — the asset class is growing and is only in its early days, so I am focused on the long-term opportunity versus the short-term market conditions,” said Oliver Schäfer, who expected 15 years as an Executive Director at JPMorgan and now heads the German wing of 21Shares — the world’s first digital asset ETP issuer. “It is an exciting time to be in crypto,” he added, even as the market drags through the mud.
Funding numbers also back this notion, with $30.3 billion in venture capital flowing into the digital asset industry in H1 of 2022, as per Messari data. Some sectors have also seen massive increases from last year. For instance, DeFi saw $767 million in funding during H1 of 2021. However, the same figure spiked to almost $1.8 billion during the same period this year.
It’s a similar story for NFT projects, which saw nearly $1.5 billion in funding and deals during the first half of 2021. However, in the first half of 2022, this number has zoomed to around $6.7 billion. This growth pattern holds for the CeFi, Web3 and infrastructure sectors as well.
Therefore, while job cuts and layoffs continue, the future outlook for the digital asset industry looks good. Some organizations over-hired during the crypto boom of 2021 and are being forced to reevaluate their staffing requirements as financial pressure mounts. However, the rest of the crypto industry is still growing, and there is a shortage of talented professionals with experience or understanding of digital assets. As far as the current bear run is concerned, cryptocurrencies are cyclical in nature. If historical data is to be believed, the market should bounce back from its current low and establish new highs in time.