Most crypto product and service companies have seen huge revenue drop with the recent trend of events. In addition, the persisting bear market has dealt a devastating blow to several operational activities.
There are records of drastic drops in transaction volumes even as the profitability decreases. According to some reports, the 2022 bearish trend is turning out to be the worst in the history of digital assets.
With the broader price fall in the market, many traders and investors have lost huge funds. In addition, some companies are suffering from problems of liquidation. Also, some digital assets have been in consistent price drops for several weeks. The collapse of TerraUSD has even complicated the opinion of many people concerning the crypto space.
Many traders took to panic sell-offs to weather the raging storm of the downward trend in gains and revenue. This increases the risks of the critical nature of the market even as Bitcoin’s spot price goes below the realized price. Hence, some exchanges are bringing down their costs of operation. This quest has led to the laying off of some of their employees.
Among some of the firms cutting down their staff strength is Huobi. According to reports, the crypto exchange drops about 30% of its staff force due to the current bearish market trend.
Huobi is a prominent crypto exchange with a solid operational base in China. However, the removal of Chinese users and the current low market performance are taking a toll on the firm.
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Colin Wu, a notable reporter, disclosed through Twitter Huobi’s staff reduction stance. He cited some reasons for the drop in the headcount: low profitability and the elimination of Chinese users. However, on the part of Huobi, the crypto exchange is yet to release any statement concerning a possible staff layoff.
Other Crypto Exchanges Reducing Their Staff Strength
This report on Huobi embarking on staff reduction sin’t the only firm with such action in the industry. There have been other crypto exchanges with similar plans of downsizing.
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Coinbase, one of the top U.S. crypto exchanges, has reportedly disclosed a layoff plan for about 18% of its staff. It cited the reason for its action as the prevailing macroeconomic situation. Also, Gemini, Crypto.com, and Banxa have plans for a staff reduction of 10%, 5%, and 40%, respectively.
The bear market remains the main reason behind the layoff of staff by these companies. The firms are all striving to control the effects of a drastic revenue drop in their cost management.
Additionally, BlockFi is not left out in the staff reduction movement. The firm announced a layoff of 20% of its staff.
Featured image from Pixabay, chart from TradingView.com