Introduction
Sam Bankman-Fried is the name that echoed the crypto space for the last few days. The CEO of FTX and Alameda Research became the source of massive destruction with the recent scandal.
From November 10th, popular news websites have covered how the industry is suffering. VCs, investors, protocols, companies, and celebrities (to name a few) felt the pressure of the collapse. In this article, we’ll cover how the collapse of FTX is impacting hiring.
Will hiring stop? Will companies rescind offers? We took the time to ask 30+ multichain protocols from the FTX and Solana ecosystems to see how SBF's poor decisions affected their hiring.
Data
The current world situation (war and hyperinflation) affects the job market. Niches that suffer the most are correlated with volatile assets: crypto, stocks, commodities, you name it. During this bear market cycle, businesses have laid off a lot of people. Let’s go through the current list of layoffs from this month.
- Nov. 17, 2022: Nestcoin lays 100 people off (FTX related)
- Nov. 10, 2022: Crypto exchange Coinbase reduces an estimated 60 job positions (Non-FTX related)
- Nov. 9, 2022: Meta slashes over 11,000 jobs, an estimated 13% of its workforce (Non-FTX related)
- Nov. 4, 2022: Web3 gaming studio Mythical Games lays off 10% of employees, an estimated 32 individuals (Non-FTX-Related)
- Nov. 3, 2022: Payments processor Stripe cuts over 1,000 jobs, about 14% of its workforce (Non-FTX-Related)
- Nov. 2, 2022: Dapper Labs reduces workforce by 22%, about 135 staff members (Non-FTX-Related)
- Nov. 2, 2022: Crypto exchange BitMEX cuts 20% of staff, about 53 employees (Non-FTX-Related)
- Nov. 2, 2022: Digital Currency Group cuts 13% of staff, placing its headcount at 66 (Non-FTX-Related)
- Nov. 1, 2022: Crypto finance firm Galaxy Digital to cut one-fifth of workforce, an estimated 170 employees (Non-FTX-Related)
In our case, we talked with companies which were exposed to FTX and Solana. While we are going to mention some of their names, some other companies asked us to keep data private.
After some friendly chatting, we asked them three questions:
- Has the current situation forced the company to lay off employees?
- Has any offer been rescinded?
- If you guys were hiring before the event, have you stopped hiring?
Answers:
- 93% said it didn't affect their hiring. Many companies mentioned that they were not hiring previous to the scandal;
- 100% confirmed that they did not rescind offers;
- 89% said they didn't fire anyone.
After running the numbers, the situation doesn't look terrible. It is worth mentioning none of these protocols/companies have declared insolvency/bankruptcy at the moment of this writing. The information will be changed accordingly if there are any updates.
A small percentage of the interviewed people were open to the possibility of *changing their hiring practices or staff- in the future.
“The incident has affected the individual investors, VC communities, backers and other crypto businesses. The job market has also been affected: we can use coinbase as an example, which will layoff more employees in the fresh round of job cuts (according to news). TVL of most of the protocols has been dropping or even reached zero, projects are trying to cut down the expenses in one way or the other. One way to reduce expenses is to halt new hiring or downsizing. Marketing-related people such as the ones who conducted AMAs or promotions are equally affected due to lack of business.”
— Francium Protocol
“We recognize that the liquidity crisis in our industry has left many looking for new jobs. At Orderly, we are committed to building solutions that eliminate situations like this in the future. Our doors are always open to talented candidates that share our vision and ethics for the future of decentralization.”
— Orderly Network
“We haven’t fired anyone as a result of FTX-Alameda and we didn’t have any outstanding offers out at the time. As a DAO we have people contributing in a variety of ways for different term lengths. We are always on the lookout for people from our community or ecosystem who can help us and that hasn’t changed. We are more committed than ever to keep building and invite those who share our values to contribute to the DAO.”
— Marinade
“So for now there have been no changes in our staff policy, although the events have of course affected us and we will need to carefully consider our budget decisions”
— Liquid Staking
Is the previous information a good sign for the space? At the moment it is better than a bunch of bankrupt companies letting everyone go (something might occur shortly). Regardless, we have some less graceful speculations.
Predictions
Those who cannot remember the past are condemned to repeat it.
— George Santayana
On May 7th of the current year TerraUSD, an algo stablecoin, collapsed and so did the Luna token: all part of the Terra blockchain. The scandal whipped 40 billion dollars in a couple of days. Let's have a look at the correlation between the fall of the market during those days and the number of people that got fired.
The Luna Terra market destruction happened on May 7th. The layoff records show that during the same month BuenBit and Bitso fired a significant number of employees, respectively 45% of the staff and 80 employees.
In June, a month after the incident, we saw the biggest layoffs of the year.
- June 28, 2022: Huobi Global could cut over 30% of workforce as China crackdown leads to fall in revenue
- June 27, 2022: Australian crypto exchange Banxa lays off 70
- June 24, 2022: European Crypto Exchange Bitpanda cuts staff by 270
- June 20, 2022: Bybit to reduce workforce by 30%
- June 14, 2022: Coinbase lays off around 1,100 employees
- June 13, 2022: Crypto.com, BlockFi to cut over 400 jobs
- June 3, 2022: Brazilian crypto unicorn 2TM lays off over 80 employees
- June 2, 2022: Middle Eastern crypto exchange Rain reportedly lays off dozens of employees
- June 2, 2022: Gemini cuts 10% of staff
In the current month, only three layoffs appeared on the list. Even though this could be the beginning of contagion, more than two weeks passed since FTX declared insolvency: so it is unlikely to see massive layoffs.
Prediction one: any company related to FTX firing people this month was previously close to bankruptcy, went bankrupt, or had their funding on FTX.
Prediction two: massive layoffs from affected companies will be in the next few (2/4) months (based on previous trends)
Companies need time to reevaluate their budgeting and needs for the future, it’s not a one-day process.
This is a hypothesis, not a fact. The following months will show if it's an accurate assumption.
Conclusion
FTX damaged the space even further. While there are immediate consequences, hiring doesn't seem one. Cryptojobslist.com still has many companies hiring on its website. It is also the best time to hire according to Cz:
"Right now is much better to hire, because during bull markets everyone is starting their own projects and everyone is paying ridiculous amounts of compensation. Now the market is more balanced, there is top talent that is available and we want to hire them”
— Changpeng Zhao
Remember, the biggest hiring months are January and February. Yet in a bear market and a terrible economic situation, we still have people looking for talent. Some of the companies we mentioned are still hiring! Find your next job at cryptojobslist.com
Further reading: you an read an in-depth research on FTT market cap after FTX collapse in this research by Coingecko.
