The Algorand Foundation on Wednesday joined the ranks of crypto firms cutting headcount, losing 25% of its fewer than 200 employees and citing the “uncertain global macro environment” and the broader crypto slowdown.
The cuts came as a wave of layoffs swept across the industry. In February, the Gemini Space Station (GEMI) said it would eliminate about 200 positions, about a quarter of its workforce, a figure that had risen to 30% by mid-March. On Thursday, Crypto.com said it was cutting 12%, about 180 roles.
This is on top of the 20 employees who found jobs earlier this month at OP Labs, a company that builds layer-2 blockchain Optimism, and the five full-time employees and three contractors who found jobs at PIP Labs, the team behind Story Protocol, making up 10% of its workforce. Messari, a crypto data provider that now bills itself as an AI-first company, announced its third round of layoffs through 2023 along with a CEO change without disclosing any numbers.
Official explanations varied. Algorand clearly pointed to macro conditions and weak token prices, though many interpreted its cut as a pivot toward greater use of AI in workflows.
“AI is now too powerful to be used in Gemini,” the company said in its letter to shareholders. “Not using AI in Gemini will soon be the equivalent of working with a typewriter instead of a laptop.”
“We are joining the list of companies integrating enterprise-wide AI,” a Crypto.com spokesperson told CoinDesk on Thursday, pointing to increased efficiency requiring fewer workers. Chris Marszalek, CEO at X, said that companies that do not look towards integrating AI into their processes will fail.
Algorand’s cuts reportedly affected community management and business development roles, not positions explicitly displaced by AI. To be fair, the company blamed the broader crypto environment. Its ALGO token has recently been trading around $0.09, down 98% from its 2019 peak. Bitcoin The largest cryptocurrency by market capitalization has declined 20% this quarter.
industry consolidation
Industry observers pointed to broader consolidation dynamics. Entire crypto sectors like restacking, Deepin and Layer 2s, once brimming with talent, have shrunk rapidly, while M&A activity is adding to redundancies as acqui-hires – employees acquired by purchasing a company – are displacing older employees.
“I don’t see any real indication that these layoffs have anything to do with large-scale AI workforce replacement,” said Dan Esco, founder of crypto recruiting agency Up Top. “Entire categories like restacking, Deepin, and L2 that were once strong in terms of talent are basically non-existent. Companies are forced to cut costs to free up time to figure out how to execute on whatever comes next.”
The broader recruiting picture supports that reading. New job postings on major crypto job boards were about 6.5 per day in January, down nearly 80% from the same period a year earlier.
The companies mentioned in this story alone — excluding Messari, which did not disclose numbers — have announced cuts of about 450 jobs in just a few weeks. This may be the tip of the iceberg, with CoinDesk tracking the loss of more than 26,000 jobs over the course of the year in the crypto winter of 2022, a figure that took months to become clear.