Following the announcement of significant job cuts by Binance, KuCoin was expected to join the ranks of major cryptocurrency exchanges reducing their workforce. According to reports by Wu Blockchain yesterday (Tuesday), the company was preparing to lay off about 30% of its staff, or 300 people.
However, the exchange's CEO, Johnny Lyu, denied these reports on the same day, dismissing them as mere rumors. He admitted that while the exchange continues to grow, any potential cuts are part of everyday business in the rapidly changing crypto industry.
KuCoin Denies Mass Layoffs
The cryptocurrency winter of 2022 significantly impacted the digital asset space. After the pandemic boom and achieving record prices in 2021, user activity began to decline along with the decreasing value of Bitcoin (BTC) and altcoins. As a result, several cryptocurrency exchanges had to start cutting costs and reducing the workforce that had expanded since 2020.
For example, the Winklevoss billionaire brothers' exchange, Gemini, has made cutsto its staff three times already. Mass layoffs exceeding 1,000 people were also reported at Binance. The information about cuts at KuCoin cited three different company employees and seemed to fit into recent cost-saving trends.
"The main reason is that the strict KYC policy was launched after being sued by the United States, which led to a decline in the exchange's profits," Wu Blockchain explained the move.
SCOOP: Following Binance, cryptocurrency exchange KuCoin will lay off 30% of its workforce. Confirmed by more than three internal employees. KuCoin has nearly 1,000 employees. The main reason is that the strict KYC policy was launched after being sued by the United States, which…
— Wu Blockchain (@WuBlockchain) July 25, 2023
KuCoin's CEO commented on the reports in less than two hours, stating that these were rumors and that the exchange "is operating smoothly." In the first half of 2023, it increased the number of users and listings and focused on gradual staff expansion.
However, Lyu admitted that the cryptocurrency industry is changing rapidly. Therefore, the exchange regularly assesses its organizational structure based on employees' performance.
"So it is not layoffs, and it is all about making the organization more dynamic and competitive," Lyu commented.
3/ The crypto world changes fast. To stay on top, we regularly evaluate our org structure based on employee performance and company development. So it is not layoffs, and it is all about making the organization more dynamic and competitive.
— Johnny_KuCoin (@lyu_johnny) July 25, 2023
It should be noted that KuCoin's CEO did not deny that the exchange is indeed letting people go. He simply didn't call the current actions mass layoffs.
The Cryptocurrency Industry Faces Problems
Although KuCoin claims not to be terminating 30% of its staff, such moves have become commonplace in the cryptocurrency industry in recent times. Not long ago, ConsenSys, a company involved in cryptocurrency software, confirmed its plans to reduce 11% of its current workforce, which numbered at nearly 100 positions.
Similar plans were announced by Coinbase, intending to lay off about 20%, or 950 people. Last year, Blockchain.com, a cryptocurrency exchange based in Luxembourg, decided to reduce its workforce by 25%.
In 2023, the value of Bitcoin increased by over 60%, and the total market capitalization of this digital asset exceeded $1 billion. However, the question remains whether this will be enough for the industry to forget about the shock caused by the collapse of FTX and the Terra ecosystem last year. Especially since user activity and market depth currently remain low.
This article was written by Damian Chmiel at www.financemagnates.com.
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