Gemini – the crypto exchange spearheaded by billionaire twins Cameron and Tyler Winklevoss – announced first-ever job cuts as the months-long crypto selloff had shown no signs of reversal yet. Around 10% of the existing staff will be laid off, according to an internal memo acquired by Bloomberg.
Contraction Phase
In the memo addressing their employees, the brothers admitted that as the industry sunk into the state of “crypto winter” – a term referring to prices remaining bearish over a period of time – the company is “in the contraction phase.” Geopolitical and macroeconomic turmoil has, in addition, added fuel to the firm’s current state of stasis, the brothers noted.
Since trading fees usually constitute a major part of exchanges’ revenues, low trading volume during the bear markets tends to cause a huge impact on them. In 2018, numerous firms had to trim their staff size or even shut down in order to accommodate the reality of declined interest in digital assets.
As a privately held company, Gemini did not release a specific number of its employees. According to LinkedIn, the exchange currently has 1038 employees. A 10% staff cut indicates that more than 100 employees will be off the job. They will receive health benefits and “separation packages” from the company.
Due to the “turbulent market conditions that are likely to persist for some time,” the twins added that the company will adjust its business strategy accordingly, narrowing its focus down to products critical to its mission. Though acknowledging that cutting staff is a difficult decision, the twins believe it would make the company “better over the long run.”
After raising $400 million in a funding round last November, the popular New York-based cryptocurrency exchange had a valuation up to $7 billion.
Gemini Is Not Alone
Gemini is not the first – likely not the last – major exchange that has announced massive layoffs when crypto assets struggle to rebound during a risk-off season.
In the wake of the Africa-based exchange, Bitmax, laying off 25% of its staff – a total of 75 employees – the retail-favorite trading app Robinhood also announced to let go of 9% of its full-time employees in the same month. At that time, Robinhood CEO Vlad Tenev cited “duplicate roles and job functions” as the main reason for the cuts.