The Algorand Foundation on Wednesday joined the ranks of crypto companies that have reduced their workforce, losing 25% of its fewer than 200 employees and citing the “uncertain global macroeconomic environment” and a broader crypto slowdown.
The cuts came as a wave of layoffs proliferated across the industry. In February, the Gemini Space Station (GEMI) announced it would cut about 200 positions, or about a quarter of its workforce, a figure that had risen to 30% by mid-March. On Thursday, Crypto.com announced a 12% reduction, or around 180 positions.
That’s in addition to the 20 employees who were hired at OP Labs, the company building Layer 2 blockchain optimization, earlier this month and the five full-time employees and three contractors laid off at PIP Labs, the team behind Story Protocol, 10% of its workforce. Messari, a crypto data provider that now bills itself as an AI-focused company, announced its third round of layoffs since 2023 alongside a CEO change, without giving a figure.
Official explanations varied. Algorand clearly highlighted macroeconomic conditions and weak token prices, although many presented their cuts as a pivot toward greater use of AI in the workflow.
“AI is now too powerful not to be used at Gemini,” the company said in its letter to shareholders. “Not using AI at Gemini will soon mean showing up to work with a typewriter instead of a laptop.”
“We are joining the list of companies integrating AI enterprise-wide,” a Crypto.com spokesperson told CoinDesk on Thursday, noting increased efficiency requiring fewer workers. X CEO Kris Marszalek said companies that don’t move toward integrating AI into their processes will fail.
Algorand’s cuts would have affected community management and business development roles, not positions obviously displaced by AI. To be fair, the company blamed the broader crypto environment. This is the ALGO token which recently traded around $0.09, down 98% from its 2019 high. Bitcoin BTC$70,738.84the largest cryptocurrency by market capitalization, lost 20% this quarter.
Industry consolidation
Industry observers have pointed to broader consolidation dynamics. Entire crypto sectors like resttaking, DePIN, and Layer 2, which were once teeming with talent, have contracted sharply, while M&A activity adds to layoffs as acquisitions (employees acquired by purchasing a company) replace old employees.
“I don’t see any real indication that these layoffs have anything to do with the large-scale replacement of the AI workforce,” said Dan Escow, founder of crypto recruitment agency Up Top. “Entire categories like resttaking, DePIN and L2 that were once talent-rich are virtually non-existent. Companies are being forced into cost-cutting mode to save time and figure out how to execute what comes next.”
The broader hiring situation supports this reading. New job postings on major crypto job boards were posted at around 6.5 per day in January, down around 80% from the same period the previous year.
Only the companies mentioned in this article – with the exception of Messari, which did not disclose figures – announced around 450 job cuts in a few weeks. This may be just the tip of the iceberg: During the crypto winter of 2022, CoinDesk recorded more than 26,000 job cuts over the course of the year, a tally that took months to become evident.