The digital assets industry got hit with a series of huge layoffs at major crypto-related companies like BitMex, Galaxy Digital and DCG. Each company plans on decreasing its current number of workers by 20-30% on average. The main reason is the problematic conditions on the market.
Despite the most recent but yet mild recovery of the cryptocurrency market, most blockchain-related companies are trying to cut existing costs since almost every entity that somehow worked or held cryptocurrencies could not meet the expectations of investors and experts.
In the last 12 hours of news, three large cryptocurrency companies have laid off their staff: Galaxy Digital plans to lay off 20% of its staff; BitMEX plans to lay off 30% of its staff, and DCG has laid off 10% of its staff.
— Wu Blockchain (@WuBlockchain) November 2, 2022
For example, Michael Saylor’s MicroStrategy reported a 2.1% revenue decrease since 2021, with $125.4 million. Analysts’ expectations were at $127.25 million. The drop in revenue also includes losses from the company’s cryptocurrency holdings that did not show any positivity in 2022.
While most companies are trying to hide the fact that they have to cut their expenses by firing most of their staff, the trading volume and market netflows show that the industry is going through a severe crisis and the recovery will not be possible without the prolonged uptrend fueled by fresh institutional inflows that would cause a revenue increase.
Are layoffs a market signal?
Companies cutting their current staff is not something unusual for a bear market. We saw the same tendency back in 2018 and 2019, which is why investors should not consider it a signal about the future of the crypto market, as it is more of a consequence than a cause.
Neither of the aforementioned companies commented on this matter, as they will most likely continue their operations by keeping the essential staff.
Sourced from u.today.
Written by Arman Shirinyan on 2023-06-29 01:29:06.