In recent developments, Binance, the largest cryptocurrency exchange, has faced a series of challenges, including regulatory scrutiny and legal battles, leading to significant cost-cutting measures. As the company undergoes a federal crackdown in the United States, it has decided to reduce its workforce, resulting in layoffs of over 1,000 employees. However, it appears that layoffs are not the only cost-cutting measures being implemented at Binance.
An internal email leaked by Adam Cochran from Cinneamhain Ventures has shed light on the cost-saving measures being taken by Binance. Cochran in a Twitter thread, questions CEO Changpeng “CZ” Zhao, for not disclosing the true reasons behind the layoffs.
The email reveals that the layoffs were indeed a result of cost reduction and the impact of the “current market environment and regulatory climate.” Furthermore, the email mentions the unfortunate decrease in profit, leading to the cutting of expanded benefits such as mobile phone reimbursements and an 8-year child allowance.
The leaked email also points to the possibility of more cost-cutting measures by the company, saying: “Depending on the situation, we may continue to implement further measures to reduce our expenses.”
Binance’s Transparency And Company Culture Questioned
Concerns have been raised regarding the discrepancies between the company’s statements and the leaked internal email. While CZ referred to the layoff allegations as “FUD” (Fear, Uncertainty, and Doubt), reports indicate that Binance did lay off 1,000 employees, primarily affecting the customer support team.
The news about the exchange’s layoffs has triggered various reactions within the crypto community. Eeon, an organization representing Binance customers, has demanded compensation from both Binance and the United States Securities and Exchange Commission (SEC).
The organization alleges that the interests of Binance’s clients have not been adequately represented, and they seek a penalty of 20% of the daily value of funds held per customer, amounting to $1,000 per day, to be shared equally between Binance and the SEC.
CZ Addresses Layoffs And Cost- Reduction
In response to the rumors and allegations, Binance has denied that the layoffs are solely a cost-cutting measure. Binance’s Chief Communication Officer, Patrick Hillmann, stated that the layoffs are part of a routine “talent density audit and resource allocation exercise” that the company undertakes every six months.
Hillmann emphasized the necessity of streamlining the workforce to maintain a disciplined and dynamic approach in the fast-paced crypto industry. CEO CZ echoed this sentiment, stating that the layoffs were not a result of market conditions but rather part of the talent density audit.
He emphasized that the company constantly evaluates employees’ performance and cultural fit, and it is an ongoing program rather than a specific percentage of people being let go.
Despite the layoffs, Binance reportedly continues to hire new employees, with over 300 open positions across various departments.