Genesis Adds Up to the year of Layoffs | Cuts Down Staff by 30%
Crypto lender Genesis laid off 145 employees, accounting for 30% of the total workforce.
The recent layoffs have primarily affected the sales and business development departments.
This was not the company's first round of massive layoffs. In August 2022, Genesis announced that it planned to reduce its workforce by 20%.
After suffering significant losses as a result of the collapse of 3AC
FTX, and Alamdea, crypto lender Genesis Trading laid off 30% of its workforce on January 05.
According to a Wall Street Journal report from January 5, Genesis fired 145 employees, accounting for 30% of the total workforce. The recent layoffs have primarily affected the sales and business development departments. On the development, Genesis' representative said,
“Genesis has made the painful decision to cut its global headcount as we continue to face significant industry challenges. These steps are part of our continuous efforts to advance our company.”
This was not the company's first round of mass layoffs. In August 2022, Genesis announced that it planned to reduce its workforce by 20% in order to reduce costs. In the same month, CEO Michael Moro also announced that he would be stepping down from leadership and moving into an advisory role.
Possible Reasons Behind Layoff
In 2022, the company suffered significant losses as a result of loans made to trading companies like Alameda Research and the crypto hedge fund Three Arrows Capital (3AC). Due to the liquidity crisis that these companies faced, bankruptcy petitions were filed, and as a result, Genesis faced the heats of these fallouts.
As per reports, Genesis extended credit to FTX's sister trading firm Alameda Research in the hundreds of millions of dollars prior to the bankruptcy filing in November. It also contributed significantly to the 3AC hedge fund, which was claimed to be worth around $2.4 billion.
This has given a clear indication of the financial instability that the crypto giant is currently experiencing, as well as raising concerns about its long-term viability in the crypto market.
2022 was the Year of Layoffs
The prolonged crypto winter has significantly affected all corners of the crypto industry, forcing some of the sector's leading companies to downscale their expansion plans.
As of December 30, 2022, the crypto sector had lost approximately 23,600 employees. This figure shows the industry's largest number of layoffs in a single year.
However, as the bear market continues in the new year, there is still uncertainty that crypto companies will continue the trend of massive layoffs this year as well.
To learn how the 2022 tech layoffs affected the Indian market, read this blog: Tech Layoffs Affect India: Are We Moving Towards a Global Recession?
