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As the market slumps, Crypto.com is trying to hide the pain
In June, cryptocurrency exchange Crypto.com announced it was laying off around 260 employees, or 5 percent of its workforce, due to the widespread downturn in the crypto market. But layoffs did not end there.
Sources in and outside the firm tell The Verge that the company has quietly let go of hundreds more employees since the initial layoffs. These new layoffs have not been publicized, and it’s difficult to estimate their exact number. Crypto.com has been trying to limit knowledge of the extent of these departures even within the company, with CEO Kris Marszalek refusing to answer a question about the total figure in a recent employees-only town hall meeting.
All this suggests that Crypto.com — one of the most visible players in the crypto market, with a Super Bowl ad starring LeBron James and its own named stadium, formerly LA’s Staples Center — might be under greater financial stress than publicly known.
“We were assured the layoffs would impact 5 percent, 260 employees only,” one source with close knowledge of the situation told The Verge. “People in the company recently noticed many employees disappearing from our internal slack or scheduled meetings.”
“Due to the lack of internal transparency, one can only estimate the extent of this layoff round: we increased our staff by ~50 percent since 2021, and almost all of them were hired to fuel growth. Now it seems these additional ~1,300 staff are viewed as costs to be reduced, in order to save the business,” the source continued. The Verge has granted sources for this story anonymity due to their fear of reprisals from company management.
The unpublicized layoffs were addressed in a Crypto.com town hall meeting that took place on August 10th, a copy of which was obtained by The Verge. In a Q&A section, Marszalek was asked about the exact numbers of layoffs and whether management could be more transparent about this process. He replied that the layoffs were now finished but that he was under no obligation to provide details of their scope.
“I want you to understand that this is a private company, and we don’t have to follow the public US company playbook … There doesn’t have to be an announcement, there doesn’t have to be a blog post,” said Marszalek. “Of course, everybody’s always interested in the number. A number makes for a great headline, it’s a great thing to gossip about. [But] as co-owners of this company, you should ask yourself, ‘is it in my interest for this number to be out there?’ And I’ll leave it at that.”
Marszalek’s responses meant “nobody was happy,” another source, an anonymous employee at the company, told The Verge. “After we lost so many teammates we needed support and strong leaders. I wanted someone to tell me it would be okay and I was doing a good job, but instead [it felt like] I got told to shut up and get back to work. It felt insulting.”
Details of the unannounced layoffs were first reported by Decrypt earlier this week, with the publication noting that recent employee reviews of the company on Glassdoor refer to “massive layoffs out of the blue” and criticize the firm as “very unstable.”
“The company is hiding the fact that they’ve laid off more than 1,000 employees,” says one review, dated July 10th. (The Verge was unable to confirm this number.) “They’ve removed the company directory so we can’t see the numbers go down. Management has been silent about the issue and everyone is terrified that their job will be next. It’s not good for morale to see that 1/3 of the invitation list on your next meeting is disabled accounts.”
A lack of clear communication about the layoffs has led to confusion within the workforce, particularly around tools that could give workers insight into the number of people employed by the company. In one case, employees reported an abrupt change in access to BambooHR, an internal tool used by some employees as a staff directory. Crypto.com denied that they revoked access via Victoria Davis, head of corporate affairs. The company also closed down two Slack channels that included every employee, which effectively eliminated an information source that some employees used as an informal tally of all workers at the company. Davis said these channels were removed for security purposes.
Crypto.com did not respond to questions about the exact number of recent layoffs. Though, in a statement, Davis said, “As we announced in June, we conducted reductions to optimize our workforce owing to continued external economic headwinds. Now, with a clear perspective on the impact and forecast of the bear market, our workforce footprint will be aligned with our business priorities. We have a strong balance sheet and will continue to invest in product, engineering, and brand partnerships moving forward.”
Cryptocurrency businesses have faced disastrous economic conditions in recent months, as both prices and trading volumes have plummeted. Crypto lender BlockFi cut 20 percent of its staff in June; that same month, crypto exchange Coinbase said it planned to lay off 18 percent of its workforce, or around 1,100 employees. In July, NFT marketplace OpenSea laid off 20 percent of its staff, followed by a similar announcement from Blockchain.com that it was closing offices and cutting 25 percent of its workforce (around 150 employees).
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