Job cuts at Snap Inc, 2tm And Rain, but experts and crypto finance paint an optimistic picture

Of CNBCTV18.com September 5, 2022, 5:04 p.m IST (published)

Troubled times continue for the crypto industry, as Snap Inc, 2TM and Rain announced layoffs in the past week. They join a long list of crypto firms cutting back amid the current crypto winter, with data from Moneyweb suggesting that over 5,000 individuals in the industry have lost their jobs since April 2022. But despite all the slashes, crypto experts and recent financing figures. an optimistic outlook for the nascent industry.

The latest firm to join the downsizing bandwagon was 2TM, the parent company of Brazilian crypto exchange Mercado Bitcoin. The Softbank-backed organization plans to lay off nearly 15 percent of its workforce, resulting in approximately 100 job losses. This is the company’s second round of job cuts; 2TM had laid off more than 10 percent of its workforce (approximately 90 employees) at the beginning of June.

Before 2TM, Rain Financial, one of the largest crypto exchanges in the Middle East, also announced cutbacks. According to sources, the firm has let go of hundreds of employees, citing “operational needs and market conditions” as the main reasons for the move. Like 2TM, this is Rain’s second round of cuts; the Coinbase-backed company cut dozens of employees back in June as well.

While 2TM and Rain have only trimmed their workforce, Snap Inc (Snapchat’s parent company) has shut down its entire Web3 wing. The move is part of the company’s restructuring efforts, which will leave 20 percent of the workforce (almost 6,500 people) without a job, according to a report from Verge.

“As a result of a restructuring of the company, decisions were made to shut down our Web3 team. The same team I founded last year with other pirates who believed in digital ownership and the role that AR can play to support it,” said Jake Sheinman, Snap Inc’s Web3 Program Manager, in a tweet.

Crypto.com is also believed to have laid off several employees in August, its second round of job cuts this year. Earlier in June, the crypto giant let go of 5 percent of its workforce, roughly 260 people. While details of the recent job slash have not been released, it is estimated to be worse than the previous cut, according to a report by Decrypt.

Despite all these job losses, experts and recruiters in the field say the digital asset job market is still growing. “There is still a lot of demand,” said Kevin Gibson, founder of crypto recruitment firm Proof of Search, speaking to CoinTelegraph. He explained that the crypto market “lacks experienced CTOs, CMOs and token experts” and that “GameFi, Metaverse, decentralized finance and NFT-oriented companies” are actively looking for new talent.

Evidence of this comes from the fact that more traditional finance veterans are jumping into the crypto industry, despite the current crypto winter. “I believe in the long-term opportunity for crypto — the asset class is growing and is just in its early days, so I’m focused on the long-term opportunity versus the short-term market conditions,” said Oliver Schäfer, who spent 15 years as CEO of JPMorgan and now heads the German part of 21Shares — the world’s first ETP issuer of digital assets. “It’s an exciting time to be in crypto,” he added, even as the market drags through the mud.

Funding numbers also support this idea, with $30.3 billion in venture capital flowing into the digital asset industry in the first half of 2022, according to Messari data. Some sectors have also seen massive increases from last year. For example, DeFi saw $767 million in funding during H1 of 2021. However, that same figure rose to nearly $1.8 billion during the same period this year.

It’s a similar story for NFT projects, which received nearly $1.5 billion in funding and deals during the first half of 2021. However, in the first half of 2022, that number has zoomed to around $6.7 billion. This growth pattern also applies to the CeFi, Web3 and infrastructure sectors.

Therefore, while cutbacks and layoffs continue, the future outlook for the digital asset industry looks bright. Some organizations overstaffed during the crypto boom in 2021 and are being forced to reassess staffing needs as financial pressures increase. However, the rest of the crypto industry is still growing and there is a shortage of skilled professionals with experience or understanding of digital assets. As for the current bear run, cryptocurrencies are cyclical in nature. If historical data is to be believed, the market should bounce back from the current low and establish new highs over time.