With the digital asset industry mostly based on speculation and a belief that prices will always go up, the past few months have hit many companies quite hard as most assets plunged. Thousands of employees have faced the cut, with Bitpanda being the latest to lay off hundreds of its staff.
In a blog post, the Bitpanda founders announced that they are reducing the headcount at the Austrian exchange as the bear market continues to bite.
“The implications hurt: we need to let part of our team go and scale down to a target organisational size of about 730 people,” the blog post said. It added that the layoffs would ensure the exchange can “navigate the storm and get out of it financially healthy, no matter how long it takes for markets to recover, without compromising on product quality, the safety of our customers’ assets and customer experience.”
While the exchange didn’t state the exact number of people it was axing, LinkedIn shows that it has about 1,000 employees, translating to around 270 layoffs. Bitpanda joins several exchanges which have been hit hard by the downturn in the digital asset market. Since April, the market has shed half its value, with the UST/Luna collapse having a domino effect on many related projects.
As CoinGeek reported, Coinbase (NASDAQ: COIN) bid farewell to over 1,000 employees as trading volume dropped drastically and has now shut down Coinbase Pro. Crypto.com, Bitso, Gemini, BlockFi, Buenbit, Banxa, and more have also given pink slips to hundreds of employees.
For many of these firms, their biggest mistake was expanding rapidly at the height of the bull market and hiring aggressively. Many of those who laid off employees had announced that they would double and even triple their staff members this year.
Bitpanda was one of the victims of the aggressive expansion. “In keeping up with the industry, our team’s growth rate has been too high,” the blog post stated.
“We reached a point where more people joining didn’t make us more effective, but created coordination overheads instead, particularly in this new market reality. Looking back now, we realise that our hiring speed was not sustainable. That was a mistake,” it added.
Bitpanda, which in a fundraising round last August was valued at $4.1 billion, pledged to work with those that had faced the cut to ensure they transitioned smoothly to the next phase of their careers.
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