Cryptocurrency exchange Crypto.com is laying off more employees during the current crypto bear market. Here’s the latest and what’s next.
What Happened: After laying off 5% of its workforce in June, Crypto.com is now planning another round of job cuts, according to a report from Decrypt.
The report said the current layoffs are being kept quiet, but will be “much bigger” than the 5% reduction in June. Crypto.com previously told employees that the 5% job cuts in June would be the last.
“They lied,” a source told Decrypt. The source has been named as an anonymous managerial employee of Crypto.com. Decrypt confirmed the layoffs with several other sources.
A source told the crypto media outlet that additional layoffs were communicated at an “all hands” quarterly call last Friday.
Crypto.com may not publicly announce the job cuts, according to the report.
“Leadership expressed they had no intention of going public, top management is unlikely to do an announcement.”
A percent of employees or number could not be identified by sources, but was said to be “much bigger than the first one.”
“The business is cutting down to bare minimum to survive the likely long bear market -internal initiatives are about trying to save every penny.”
While June job cuts primarily centered on customer service and growth roles, the latest round of job cuts is said to be more critical roles like the company’s exchange, app and wallet.
“We announced reductions in June, and since that time we have optimized our workforce to align with current external economic headwinds,” a Crypto.com spokesperson told Decrypt.
Related Link: How To Buy Crypto.com Coin CRO
Matt Damon to Blame?: To some outside the world of cryptocurrency, Crypto.com might be best known for its commercial starring actor Matt Damon highlighting how “fortune favors the brave.”
Crypto.com spent a reported $100 million on its advertising campaign that saw the Damon ad get heavy rotation on television and used elsewhere. The commercial was also played during Super Bowl LVI on NBC, a unit of Comcast Corporation (NASDAQ: NASDAQ:CMCSA) in February. Super Bowl commercials came with a cost of $6.5 million for a 30-second slot.
The 2022 Super Bowl was nicknamed by some as the Crypto Bowl, with a handful of cryptocurrency companies placing big bets on commercials during the game and promotions around the big game.
Some have already started to point out the similarities of the Crypto Bowl to the 2000 Super Bowl, named the "Dot-Com Super Bowl." The Crypto Bowl saw companies spend lots of money on Super Bowl commercials only to face job cuts and potentially failing to exist down the road.
Many of the companies that advertised in the 2000 Super Bowl no longer exist, with some folding shortly after the big game. Internet companies accounted for around 20% of the advertisements during the 2000 Super Bowl, with a cost of $2.2 million for a 30-second time slot.
Along with heavy advertising spend, Crypto.com has also placed large bets on sports related sponsorships, a move that will likely come into question with the pending job cuts. The company signed a 20 year, $700 million deal for the naming rights to the Staples Center in California, home of the Los Angeles Lakers, Los Angeles Clippers, LA Kings and Los Angeles Sparks.
Crypto.com also has sponsorships with Formula 1 (NASDAQ: FWONA)(NASDAQ: FWONK), several soccer teams and an upcoming deal with the 2022 World Cup in Qatar.
Why It’s Important: Crypto companies have been among the sectors cutting jobs in 2022. With the price of Bitcoin (CRYPTO: BTC) and other cryptocurrencies falling, a crypto winter bear market is here, with companies questioning how long it will last.
Coinbase Global (NASDAQ: NASDAQ:COIN) said in its second quarter earnings release that it was an “all weather company” prepared for crypto price cycles. The company put an emphasis on streamlining costs, including an 18% employee reduction announced in June.
Like Crypto.com, Coinbase was a big spender during Super Bowl LVI with an ad that went viral and saw a strong inflow of customer signups. Crypto.com saw its app rise after its commercial with Damon aired, but the question now will be if the cost was worth it.
Crypto.com cutting jobs could indicate further pressure on cryptocurrency platforms with lower trading volume and lower prices for cryptocurrencies.
BTC Price Action: Bitcoin trades at $23,397.76 on Wednesday, versus a 52-week range of $17,708.62 to $68,789.63.
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