Algorand Foundation on Wednesday joined the ranks of crypto companies cutting jobs, losing 25% of its fewer than 200 employees, citing an “uncertain global macro environment” and the broader cryptocurrency downturn.
The layoffs come amid a wave of layoffs across the industry. Gemini Space Station (GEMI) announced in February that it would cut about 200 jobs, about a quarter of its staff, but that number had increased to 30% by mid-March. On Thursday, Crypto.com announced it would be cutting 12%, or approximately 180 roles.
This is in addition to the 20 employees who gained the privilege earlier this month at OP Labs, a company building Layer 2 blockchain Optimism, and five full-time employees and three contractors at PIP Labs, Story Protocol’s team that makes up 10% of its workforce. Messari, a cryptocurrency data provider that bills itself as an AI-first company, announced its third layoff since 2023 along with a CEO change, although it did not disclose the numbers.
Official explanations varied. While Algorand squarely pointed to macro conditions and low token prices, many companies were framing reductions as a pivot towards further use of AI in their workflows.
“AI is now too powerful to be used in Gemini,” the company said in a letter to shareholders. “Not using AI in Gemini would be the same as showing up to work with a typewriter instead of a laptop.”
“We are joining the growing list of companies integrating enterprise-wide AI,” a Crypto.com spokesperson told CoinDesk on Thursday, noting that the reduction in employees will improve efficiency. CEO Chris Marszalek told X that companies that don’t move toward integrating AI into their processes will fail.
Algorand’s job cuts reportedly hit community management and business development roles, not positions that were explicitly replaced by AI. To be fair, the company blamed the broader crypto environment. The ALGO token has recently been trading around $0.09, down 98% from its 2019 peak. Bitcoin BTC$70,738.84The company, the largest cryptocurrency by market capitalization, fell 20% in the quarter.
industry consolidation
Industry players pointed to broader consolidation moves. The entire crypto sector, which was once rich in talent, such as Restaking, DePIN, and Layer 2, has shrunk rapidly, while M&A activity has created redundancies as traditional employees are replaced by acquirers (employees acquired by acquiring companies).
“We don’t see any real indication that these cuts have anything to do with large-scale replacement of AI talent,” said Dan Eskow, founder of crypto recruitment firm Up Top. “Entire categories that were once rich in talent, such as risk-taking, DePIN, and L2, are basically non-existent. Companies are being forced into cost-cutting mode to buy time to figure out how to execute what comes next.”
The broader adoption picture supports that view. The number of new job openings across major cryptocurrency job sites in January was approximately 6.5 per day, a decrease of approximately 80% compared to the same period last year.
The companies mentioned in this article alone (excluding Messari, which did not provide numbers) announced around 450 layoffs in the past few weeks. This may be the tip of the iceberg, but CoinDesk is tracking more than 26,000 job losses for the year in the crypto winter of 2022, and it took several months for this number to become clear.
