Huobi, one of the largest cryptocurrency exchanges, plans to lay off around 20% of its staff. The layoffs at the exchange are the latest move that portrays the negative effects caused by the plunging cryptocurrency prices.
Huobi plans to lay off 20% of its staff
The Huobi exchange admitted to these layoffs to Reuters, saying that the company was planning to reduce its workforce by around 20%. However, it added that the layoffs would not be implemented now but maintained that a smaller team was needed going forward because of the current bear market.
The statement by Reuters follows an earlier message shared by the founder of Tron, Justin Sun, who is also part of the Huobi global advisory board. Sun said that the changes at Huobi were yet to start, but they would be completed by the end of the current now. The Tron founder added that the Huobi exchange currently has 1,100 employees.
Sun had shared an internal memo to the Huobi staff saying that the company was like “a fire in the crypto winter” despite the negative macro environment. He pointed to growth metrics the exchange had seen, such as recording an average of 20,000 new daily users in the last three months.
In November last year, Huobi ranked as the eighth-largest cryptocurrency exchange by trading volumes. Sun noted that the restructuring would be a short-term pain the exchange had to endure, but it would eventually benefit the exchange.
Crypto firms feel the pinch of the bear market
The layoffs in the crypto sector come in the backdrop of a sharp crypto winter that has caused a notable drop in digital asset prices over the past year. The FTX fallout in November last year dropped confidence in these platforms. The reserves and solvency of centralized exchange have been a cause for concern.
Genesis, a troubled crypto lending company that halted withdrawals because of exposure to FTX, recently trimmed its workforce by 30% in the second set of layoffs that the company has made in less than six months. Genesis is also under pressure from Gemini to resolve its financial situation and ensure that Gemini Earn users can access their funds.
Silvergate Capital, a bank that has shown interest in the crypto sector, also reported a sharp drop in Q4 revenues as customers withdrew over $8 billion from the platform.
The layoffs are being used as a cost-cutting measure amid dropping trading volumes. While the bear market persisted for most of 2022, the volatility in the crypto sector has dropped significantly, with the lack of solid price movements causing low volumes. Exchanges mainly derive their revenues from trading fees.
The Huobi token has been affected by the news of the layoffs at the exchange, having dropped by around 11% over the past week. HT is currently down by 88% over the past year.
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