Meta Joins Growing List of Tech Companies Letting Workers Go – Crypto Firms to Follow Suit?

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Fredrik Vold

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October 23, 2023

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With Facebook-owner Meta now joining a growing list of tech companies that are letting workers go, the inevitable next question becomes what crypto companies will do.

Per a report from the Wall Street Journal, “large-scale layoffs” are set to begin at Meta as early as this week. The layoffs could be the largest round in a recent spate of layoffs in the tech industry, the report said, citing “people familiar with the matter.”

The layoffs at Meta followed a round of layoffs at Twitter last week, where the company’s new owner Elon Musk famously fired around half of the company’s staff.

Twitter had around 7,500 employees before Musk’s takeover, which would mean that around 3,700 workers lost their jobs.

Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day.

Everyone exited was offered 3 months of severance, which is 50% more than legally required.

— Elon Musk (@elonmusk) November 4, 2022

According to the Wall Street Journal’s sources, the coming cuts at Meta will be smaller on a percentage basis than those at Twitter, although they would most likely be bigger in terms of the number of workers affected.

In an earnings call on October 26, Meta CEO Mark Zuckerberg hinted that cuts were coming, saying the company needs to focus its investments on “a small number of high priority growth areas.”

“So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year,” Zuckerberg said in the call, while also adding:

“In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”

The third quarter was not a good one for Meta investors, with the company losing over $3.5bn. The massive quarterly loss was largely due to massive investments that have not yet paid off in Meta’s metaverse-focused division known as Reality Labs. According to the earnings report, that division alone lost a staggering $3.67bn for the quarter.

Crypto companies to follow suit?

The question being asked in crypto now is whether crypto industry will follow the tech industry and also announce layoffs. The two industries are known to be closely related, sharing many of the same venture capital investors, and often also trading similarly in the public stock and crypto markets.

Additionally, crypto companies are known to be highly sensitive to the price of major cryptocurrencies. And given that crypto remains in a bear market – which has now lasted for about a year – it is not inconceivable that layoffs will also be on the agenda for crypto companies.

Layoffs in at least 3 companies so far in November

So far in November, at least three large crypto companies have announced layoffs affecting between 10% and 30% of their staff, the widely followed Twitter user Wu Blockchain reported earlier in the month.

In the last 12 hours of news, three large cryptocurrency companies have laid off their staff: Galaxy Digital plans to lay off 20% of its staff; BitMEX plans to lay off 30% of its staff, and DCG has laid off 10% of its staff.

— Wu Blockchain (@WuBlockchain) November 2, 2022

Galaxy Digital, a company led by the former investment banker Mike Novogratz, is reportedly exploring eliminating “as much as 20% of its workforce,” although this number could still be changed.

“We are always considering optimal team structure and strategy and will share future plans when finalized,” Galaxy’s spokesperson Michael Wursthorn said in a comment at the time, while also admitting that the industry as a whole “continues to face macroeconomic headwinds.”

Second, the major crypto spot and derivatives exchange BitMEX has reportedly also laid off staff recently, although the company has declined to say exactly how large a percentage of their staff was affected.

Lastly, Digital Currency Group (DCG), a large firm with subsidiaries in many parts of the crypto industry, has reportedly cut 10% of its workforce as part of a restructuring process. The layoffs were necessary to position for its “next phase of growth,” a spokesperson was quoted as saying.