Companies rush to seize the opportunity of crypto winter to recruit bankers.
The video of the Winklevoss twins, a billionaire, singing “Don’t Stop Believing” shortly before they fired 10% of their staff from Gemini, their cryptocurrency exchange. This was deemed tone-deaf by some listeners.
After claiming that Mark Zuckerberg stole their idea for Facebook, the brothers sang the song at a New Jersey bar. The pair had just days before told their employees, or “fellow astronauts”, that “crypto winter” had started and that it was time for drastic cuts.
This week, the cryptocurrency market was in turmoil as lender Celsius Network stopped withdrawals and Binance exchange temporarily suspended trading, adding to the already volatile space. Many are now rethinking their belief in the crypto-dream. Gemini is not the only one.
Coinbase, the largest cryptocurrency company in the world, has announced plans to lay off almost one-fifth of its staff after Bitcoin dropped to its lowest point since December 2020. All cryptocurrencies lost more than $100 billion (PS82bn).
BlockFi and Crypto.com have also cut hundreds of jobs in this sector as the market slumps. As digital currencies become less popular and savers abandon high-risk assets, industrywide job cuts are likely to continue.
Many investors are furious at the lure of celebrities like Matt Damon to bet on digital coins. Jon Schwarz, a writer on Twitter, pointed out that if you purchased $1,000 worth of bitcoin the day Matt Damon’s “Fortune favours brave” commercial was released it would be worth $375.
Not everyone is being left behind. Companies outside of the sector are bracing for a tech talent-feeding frenzy in the hope that they can profit from the meltdown.
For years, crypto companies have been securing the best talent, especially software engineers, promising them quick riches. As digital skills demand rises, tech bosses have been waiting for IT gurus to fill the void in a tight labour market.
John Mountain, Starling Bank’s chief information officer, feels that those who were recently cut should feel hopeful. “If you’re a software engineer, and suddenly available following a public announcement from your firm, then your LinkedIn inbox is very full.”
He is optimistic because of recent job postings. Adzuna, a job search engine, reports that the number of vacancies for UK tech jobs is at an all-time high of ten years. According to the Computing Technology Industry Association, May saw record-breaking postings for engineers and software developers in the United States.
Companies are trying to capitalize on the crypto winter. Prashanth Chandrasekar runs Stack Overflow which is a question-and-answer site for computer programmers. He says that his company is hiring aggressively and seeking blockchain developers. He says, “It would have been shortsighted not to take advantage of all talent.”
The best traditional companies that have been out of fashion among recent graduates could reap the greatest benefits. According to Bloomberg data, Coinbase, which allows people to buy and sell cryptocurrencies online, was hired by big banks like Goldman Sachs and Morgan Stanley between January 2020 and April 2022.
Top bankers now hope that the recent round of cuts will result in many of these recruits returning to banks – an industry still desperate for tech talent.
One London-based banking chief says that “we’ve had more trouble hiring than ever before” but may be helped by layoffs at crypto companies. “Many talents could find their way back to banks in the future.”
Ex-bank executives could be questioning the revolution that they invested in cryptocurrency startups by questioning their decision to pack it all. Coinbase was valued at $86bn in April 2021 (PS69.5bn), but its shares have fallen by 85pc since then.
The public anger towards big banks reached its peak in the financial crisis. Bitcoin was created to help people get back control of their finances and cut out financial institutions. Similar anger is building towards cryptocurrency bosses.
Coinbase boss Brian Armstrong responded last week to unhappy employees who asked him to remove top executives. He told them to quit and “find a company that you believe in” Rival sectors are starting to circle as the idealism about the sector declines and those who have lost their jobs or made less on the market turn against them.
Others in the crypto community are also benefiting. Binance made a dig at its competitors earlier this week by claiming that it was not easy to “say no to Super Bowl ads and stadium naming rights” but it is now hiring for more than 2,000 jobs.
Outside sectors may also be able to fill jobs that were difficult to fill in recent years.
Hargreaves Lansdown investment analyst Susannah Streeter says that redundancies will be a benefit for traditional players in terms of retention. If you were wondering if the crypto market is more green, now it’s time to “think twice” before leaving. It may not be as much fun to party in the tech sector and Bitcoin as it used to.
“The crypto crash coincided with the mass layoffs at tech startups that have been running low on cash. Raising new funds has become increasingly difficult as investors shun risky assets and shy away from raising capital. She predicts that traditional digital platforms will have a larger talent pool, which could help ease labour shortages.
“Concerns are growing about the precariousness in some parts of the tech industry. There will be a concern that a dream job could just end up being a fast track towards a P45.”
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