Bitpanda, a European exchange for bitcoin (BTC), cryptocurrencies and other assets, has laid off 270 of its employees, as a way of anticipating an “imminent recession”. The company admits to having hired more personnel than it should have, which increased its operational costs.
Among the reasons for the dismissal, according to a release of the company, they highlight that the company suffered from “hypergrowth” which led them to suffer “growing pains”. This is because, given the high demand for its products and services, motivated by the rise in bitcoin prices, they committed coordination and hiring failures that caused them to have a larger payroll than they could possibly maintain. “Looking back now, we realize that our hiring speed was not sustainable. That was a mistake,” they explain.
In recent months, market sentiment has changed dramatically, fueled by geopolitical tensions, rising inflation and concerns about an impending recession. There is a lot of uncertainty in the financial markets right now and while we know the industry is cyclical, no one knows when market sentiment will change.
Bitpanda, cryptocurrency and digital assets exchange.
The company assures that it will seek to maintain a workforce of 730 people, who are guaranteed that there will be no more layoffs in the near future. “We want to assure you that these are unique measures that we take to ensure that Bitpanda maintains what it is and has been,” they say.
Along with the layoffs, the statement also announced that All hiring processes have been stopped immediately. Several people were in the recruitment stage, but these have been cancelled.
Layoffs on the Rise at Crypto Firms
Faced with the entry of a possible recession, on which analysts estimate there is more than a 50% chance of happening, technology companies were severely hit. News about staff cuts has been quite common in recent months.
Companies like Tesla or Netflix cut their payroll as a measure to withstand a recession. For the crypto space, Bitpanda was the only exchange to lay off staff. Other platforms such as Coinbase and BlockFi also took this type of measure. In the case of Coinbase, it changed its growth projections for this year, motivated by the current “crypto-winter” that cryptocurrencies are experiencing.
The current recession that is being experienced directly affects the price of shares of large technology companies (including exchanges), which lost up to 70% of their value so far this year, as is the case of Coinbase, whose shares went from trading USD 200 in January, to just over USD 60 today. This could be motivating the recent mass layoffs, as companies resort to these practices as ways of cutting budgets and operations.
Other exchanges that are making considerable cuts in their personnel have been the Mexican company Bitso with more than 80 employees terminated and the Argentine exchange house Buenbit, who decided to execute massive layoffs of its staff. This scenario has not been limited to only companies in the cryptocurrency sector, technology and financial companies in Latin America are also having serious consequences.