After flooding the job market during the 2021 bull run, crypto companies were equally quick to lay off workers following the crash. As per an estimate by CoinDesk, over 26,000 jobs have been lost in the industry since April 2022.
During this time, companies have had to acknowledge operational flaws which were easily swept under the rug while the market was up.
In June last year, Wu Blockchain reported on an internal letter released by Bybit wherein CEO Ben Zhou admitted, “It’s evident that we haven’t used our fast growing resources properly.” Bybit tripled its staff during the bull market and has since been forced into two rounds of layoffs, with an alleged thirty per cent of employees getting cut each time.
Going into 2023, the fallout from the crypto crash has continued. Coinbase and Huobi are among several industry players to have announced job cuts this January. As per the crypto Fear & Greed index, market sentiment is still waning and there’s a long way to go before consumer trust is regained.
Market correction or a cause for concern?
Given the layoffs, it’s a wonder if the skills (formerly) valued by crypto companies can be put to other use.
“If you talk to hiring managers and executives, most skills that exist in crypto still have a demand,” says Kyber Network’s Head of Marketing, Imran Mohamad.
He believes this is especially true when it comes to technical skills such as smart contract engineering, as well as data analysis and research.
The current layoffs are a reflection of financial over-extension of the industry at large, rather than a lack of demand for talent and skill sets.
– Imran Mohamad, Head of Marketing, Kyber Network
As the popular saying goes, bear markets are for building. Those who are well-equipped with functional knowledge and crypto fluency should still be able to find a place within the industry.
In line with this sentiment, the crypto layoffs are more of a correction than anything else — companies are focusing on efficiency and making the most of their resources. Governments around the world continue to show an interest in blockchain as well, indicating that crypto prices aren’t necessarily a good gauge of the technology’s potential.
Capital isn’t flowing to these businesses the way it used to and retail investor confidence is certainly at an all-time-low, meaning a lot of these businesses are rightsizing. To the untrained eye, it may seem catastrophic, but it’s better to view it as necessary.
– De’Angello Harris, Partner, Think & Grow
Unlike previous market cycles, crypto is also less reliant on speculative investing today. It plays a key role in industries such as blockchain gaming, which are projected to continue growing. This has opened up new avenues for those looking to work in the space.
“The blockchain gaming industry is expected to grow significantly in the future and we’re already seeing very high demand for talent,” says Oasys Director, Daiki Moriyama. “The global tech industry has been impacted hard by layoffs amid a recession, so we anticipate there will be more talent that can come into the blockchain gaming industry.”
The search for job security
While job opportunities may have improved, job security still remains a concern in the crypto space. So far, it’s been closely tied to the whims of the market and poor hiring practices have only accentuated the problem.
Mohamad believes that due diligence is the key to greater job security. To get hold of a stable job, individuals must look into a company’s business and hiring plans, as well as its track record through different market cycles.
This can be tough given how a lot of crypto companies were recently established. There’s not a lot of history to account for while making employment decisions.
That being said, there are companies which have held strong throughout this market crash and as a result, are proving their foundational strength. For example, Singapore-based crypto staking provider RockX has grown threefold since 2022. It has avoided layoffs and is, in fact, looking to fill positions in 2023.
Most crypto companies are still in a hiring freeze mode and have no plans of changing that anytime soon. However, you still have a few mavericks like Cake DeFi who were at 40 employees just two years ago and are now at 160, with many more vacancies.
– De’Angello Harris, Partner, Think & Grow
Regardless of the company, Mohamad and Harris both mention the need to have a backup plan. “Those looking to improve their job security may want to be open to recruiters and new positions preemptively,” says Mohamad.
What does 2023 hold?
While a full recovery remains uncertain, there might be some silver linings for the year ahead. Investors have become more cautious, which paves the way for a market driven by purpose rather than speculation. The companies which make it through this bear market are more likely to have stronger fundamentals and use-cases.
In order for the job market to stabilise, it is of utmost importance that crypto companies find a clear and stable revenue model that works for them.
– Chen Zhuling, CEO and Founder, RockX
This is also supported by the push for regulation across the globe.
“With increased regulatory scrutiny in Singapore, players may move towards B2B regulatory-compliant business models or building Web3 businesses that focus on specific use-cases such as gaming,” says Muhamad. “They might hold off on issuing tokens of their own to avoid the risk of selling securities.”
Harris sums it up on an optimistic note saying, “The space is certainly still a bit rattled but nowhere near how bad it was in Q2 of last year. Things are looking better and better each month.”
Featured Image Credit: Forbes / MyCareersFuture
