Bitpanda, a European exchange for cryptocurrencies and other assets, has laid off 270 of its employees in anticipation of a “impending recession“. The company admits to hiring more staff than it should have, which increased its operational costs.
According to a company statement, the layoffs were partly due to the fact that the company suffered from a “hypergrowth” which resulted in “growing pains“. Indeed, faced with the strong demand for its products and services, stimulated by the rise in the price of bitcoins, it made coordination and hiring errors that led it to have a larger payroll than that which it she was able to take it. “Looking back, we realize that our speed of hiring was not sustainable. It was a mistake“, they explain.
In recent months, market sentiment has changed dramatically, fueled by geopolitical tensions, rising inflation and worries about an impending recession. There is a lot of uncertainty in financial markets right now and while we know the industry is cyclical, no one knows when market sentiment will change.
Bitpanda, cryptocurrency and digital asset exchange.
The company says it will seek to maintain a workforce of 730 people, who are guaranteed that there will be no further layoffs in the near future. “We want to assure you that these are unique steps we are taking to ensure Bitpanda remains what it is and has been.“, they say.
Apart from the layoffs, the statement also announces that all hiring procedures have been stopped immediately. Several people were in the recruitment phase, but these were cancelled.
Layoffs Rise at Cryptocurrency Firms
With the threat of a recession, which analysts believe has a more than 50% chance of occurring, tech companies have been hit hard. News of job cuts has been quite frequent in recent months.
Companies such as Tesla or Netflix have reduced their payrolls in order to be able to withstand a recession. On the cryptocurrency side, Bitpanda was the only exchange to lay off staff. Other platforms, such as Coinbase and BlockFi, have also taken such action. In the case of Coinbase, it changed its growth projections for this year, driven by the current “cryptowinter” that cryptocurrencies know.
The current recession is directly affecting the stock prices of major tech companies (including stock exchanges), which have lost up to 70% of their value since the start of the year, such as Coinbase, whose shares have gone from $200 in January to just over $60 today. This could be behind the recent mass layoffs as companies resort to these practices to cut budgets and operations.
This scenario has not been limited to cryptocurrency companies, technology and financial companies in Latin America are also suffering serious consequences.
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