Crypto.com cuts 20% of its workforce and blames FTX scandal for current problems

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As the global economy slows, companies have laid off employees left, right and center. On top of that, the FTX scandal has made things particularly difficult for crypto companies which have laid off a significant portion of their staff. Joining the list, Crypto.com recently laid off around 20% of its employees. This is the second major layoff in a year at Crypto.com. In June 2022, the crypto exchange company had also cut around 260 employees, or about 5% of its workforce at the time. Crypto.com CEO highlights negative trend in customer behavior after the FTX saga, a former popular exchange, was incriminated for embezzlement. The company, which also went bankrupt, has shaken customer confidence and had a negative impact on the entire industry. Kris Marszalek, co-founder and CEO of Crypto.com, revealed that the latest layoffs could have been avoided despite the economic downturn. However, things changed drastically when the FTX scandal hit the industry. On the company’s official blog, Marszalek confirmed, The cuts we made last July positioned us to ride out the macro downturn, but that didn’t take into account the recent collapse of FTX, which significantly damaged the confidence in the industry. This is not the only setback the crypto exchange has faced over the past 12 months. In August, Crypto.com attracted negative publicity for a financial fiasco. The company accidentally transferred $10.5 million to an Australian user’s account and didn’t realize it until months later. Besides Crypto.com, other crypto companies are also affected by economic downturns. Last week, Coinbase also laid off 20% of its staff to make up for losses over the past year. Another crypto exchange, Kraken, addressed its plan to lay off 1,100 employees or 30% of its workforce last November. In the future, more companies in the crypto industry could probably follow suit.

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