WEBVTT - Job Cuts Reflect Crypto Winter’s Deep Freeze 0:00:02.480 --> 0:00:06.080 I'm Stacy Marie Ishmel, Managing editor of Crypto for Bloomberg News. 0:00:06.360 --> 0:00:09.840 And this is Bloomberg Crypto, a daily Bloomberg IHOT podcast. 0:00:10.200 --> 0:00:29.000 It's Tuesday, March fourteenth. Here's a fact for you. We're 0:00:29.000 --> 0:00:32.640 barely three months into twenty twenty three, and already crypto 0:00:32.680 --> 0:00:36.800 companies have cut thousands of jobs this year. This is 0:00:36.840 --> 0:00:39.559 consistent with what's been happening in tech and finance across 0:00:39.640 --> 0:00:42.519 the board. There have been multiple rounds of layoffs at 0:00:42.560 --> 0:00:46.199 places like Twitter, job cuts at Meta and Google, and 0:00:46.280 --> 0:00:49.519 even at big investment banks like Goldman Sachs. In crypto, 0:00:49.760 --> 0:00:52.800 the cuts are across the board, including a big names 0:00:52.800 --> 0:00:57.880 like Galaxy, Digital, Genesis and Chainalysis. Some like the beleaguered 0:00:57.920 --> 0:01:01.760 crypto friendly bank Silvergate, Capitol and lender Amber Group, have 0:01:01.920 --> 0:01:06.120 cut as much as forty percent of their workforces. It's 0:01:06.120 --> 0:01:09.480 also true that some companies, even in this environment, are hiring. 0:01:10.240 --> 0:01:12.560 Among the crypto firms planning to add staff this year 0:01:12.640 --> 0:01:16.040 is Circle Internet Financial, the company behind one of the 0:01:16.120 --> 0:01:19.880 largest stable coins. When I spoke to their CEO, Jeremy Laire, 0:01:20.240 --> 0:01:22.360 he said, a big hiring focus this year. We'll be 0:01:22.400 --> 0:01:26.640 on software developers and on expanding globally. We are primarily 0:01:26.720 --> 0:01:31.400 hiring engineers and product leaders, and then we are continuing 0:01:31.440 --> 0:01:33.959 to expand around the world, and so we're opening up 0:01:34.000 --> 0:01:37.399 more outposts because we see there's a lot of global 0:01:37.480 --> 0:01:39.959 demand for what we do, and so we want to 0:01:40.000 --> 0:01:43.319 do that. And but principally, yeah, this is all about 0:01:43.360 --> 0:01:47.039 the incredible opportunity to develop intellectual property. So what does 0:01:47.080 --> 0:01:49.559 the state of hiring and firing and crypto suggest about 0:01:49.600 --> 0:01:53.040 the general health of the digital asset industry, Bloomberg reports 0:01:53.040 --> 0:02:03.560 to Hannah. Miller joins me now to discuss the latest Hannah, 0:02:03.640 --> 0:02:06.000 welcome back to the show. Thank you for having me. 0:02:06.440 --> 0:02:10.200 I'm always have two minds when you know, talking about 0:02:10.280 --> 0:02:14.560 things like layoffs and tech and finance and crypto, because 0:02:15.360 --> 0:02:19.079 the inasmuch as you could talk about the macroeconomic environments 0:02:19.080 --> 0:02:22.040 and interest rates, fundamentally, what we're talking about is people 0:02:22.080 --> 0:02:26.640 who had jobs no longer having jobs. But what we've 0:02:26.720 --> 0:02:31.080 certainly been seeing is in crypto, in tech, in finance, 0:02:31.720 --> 0:02:35.160 there have been what feels like so many waves of layoffs. 0:02:35.360 --> 0:02:37.680 You know, we're getting into the thousands, and in the 0:02:37.680 --> 0:02:41.000 case of the tech industry more broadly, tens of thousands. 0:02:41.000 --> 0:02:44.440 Of people. What are the prospects looking like in twenty 0:02:44.520 --> 0:02:47.640 twenty three. If you're a graduate coming out of Stanford 0:02:47.720 --> 0:02:50.040 or somewhere, are you still thinking I definitely want to 0:02:50.040 --> 0:02:53.320 work in the crypto industry. Yeah, I think for the 0:02:53.320 --> 0:02:56.600 crypto industry, it's a big wake up, Carl. I mean 0:02:56.639 --> 0:03:01.000 these layoffs have been happening for a long time now. 0:03:01.200 --> 0:03:04.519 I mean they started before we saw layoffs and you know, 0:03:04.560 --> 0:03:08.000 the mainstream tech industry as well as in finance. But 0:03:08.600 --> 0:03:13.120 it's been really interesting to see just company after company 0:03:13.120 --> 0:03:16.320 within the crypto space cut further and further, and there 0:03:16.400 --> 0:03:18.760 is this question of how much more can they cut? 0:03:18.960 --> 0:03:22.840 You know, like, how how are they our? Is there 0:03:22.880 --> 0:03:28.560 any more fat to trim? So it's it's pretty I 0:03:28.600 --> 0:03:31.359 think it's it's been a it's a very stark contrast 0:03:31.720 --> 0:03:34.320 when when you saw that crypto was a really hot 0:03:34.360 --> 0:03:36.840 sector for people to go into, you saw people leaving 0:03:36.960 --> 0:03:41.920 very cushy jobs at you know, Google Meta to jump 0:03:41.960 --> 0:03:44.880 over to a crypto company to get you know, a 0:03:44.920 --> 0:03:49.200 token bonus, a equity and a startup that they thought 0:03:49.240 --> 0:03:53.840 really had promise. It's definitely a different story, now's your point. 0:03:53.920 --> 0:03:55.640 It's not just a different story. It's kind of a 0:03:55.680 --> 0:03:59.400 mixed story, right, Like we heard from Jeremy Laircu of 0:03:59.480 --> 0:04:03.760 Circle saying that they're really excited about being able to 0:04:03.840 --> 0:04:07.280 hire more developers and they're looking at global expansion. Where 0:04:07.280 --> 0:04:10.160 are these pockets of optimism coming from despite the broader 0:04:10.200 --> 0:04:14.280 environments you've just described. Yeah, well, I think for some companies, 0:04:14.400 --> 0:04:16.640 you know, they were able to raise a lot of 0:04:16.680 --> 0:04:19.279 money during the crypto boom, they have a lot of 0:04:19.360 --> 0:04:23.919 runway that they can use to last through this crypto winter. 0:04:24.560 --> 0:04:27.800 So there are companies that still have cash to play with, 0:04:28.080 --> 0:04:31.839 and you know, they can draw in, you know, new hires. 0:04:32.000 --> 0:04:34.840 They can you know, snap up developers and maybe just 0:04:34.880 --> 0:04:37.719 got laid off of that Google job and are really 0:04:37.880 --> 0:04:41.840 looking for a new opportunity. So some companies are definitely 0:04:41.880 --> 0:04:45.960 still hiring. And yeah, hot hot areas are definitely developers 0:04:46.680 --> 0:04:50.560 people who specialize in security. That's always a concern in crypto. 0:04:50.720 --> 0:04:54.320 So you know, I think for some startups that are 0:04:54.440 --> 0:04:57.839 just starting out, like that's like having someone who who 0:04:57.880 --> 0:05:01.479 knows cybersecurity, who can help you know, FIFA protection on 0:05:01.520 --> 0:05:05.640 a platform. That's a good person to have. But yeah, 0:05:05.080 --> 0:05:09.359 there there still is a need for engineers among certain 0:05:09.400 --> 0:05:14.080 companies who definitely raised that big valuations and had big 0:05:14.120 --> 0:05:17.960 funding rounds during you know, twenty twenty one or twenty 0:05:18.000 --> 0:05:23.080 twenty two. So what I'm hearing is, if you're graduating 0:05:23.960 --> 0:05:25.640 or if you're one of those folks, it's like, I 0:05:25.680 --> 0:05:27.599 don't need to go to college because life works in 0:05:27.640 --> 0:05:31.080 your favor that way, and you have technical skills, then 0:05:31.520 --> 0:05:33.320 you as a person have a reason to be optimistic 0:05:33.320 --> 0:05:35.839 because that's the sort of the profile the skill sets 0:05:36.000 --> 0:05:38.640 that these companies are looking for. Yeah, I mean, you 0:05:38.720 --> 0:05:41.880 might not get the cushy benefits that you would have 0:05:42.040 --> 0:05:44.440 at at Google or Meta. I mean even those companies 0:05:44.480 --> 0:05:48.200 are sort of slashing you know, things like laundry at 0:05:48.240 --> 0:05:52.000 the office or you know what time, what time you 0:05:52.040 --> 0:05:53.799 have to stay at the you know, at the office 0:05:53.800 --> 0:05:57.360 to get a meal. You know, it's just things like that. 0:05:58.640 --> 0:06:01.040 You know, you might not you might have to set 0:06:01.040 --> 0:06:03.440 aside even if you are going for a mainstream tech job. 0:06:04.600 --> 0:06:06.720 But within crypto, yeah, there are still people who are 0:06:06.800 --> 0:06:09.680 very passionate about the space we're going in. You know, 0:06:10.120 --> 0:06:12.960 they're looking at programming languages that they would need to 0:06:13.080 --> 0:06:15.800 learn to work at a at a blockchain platform. So 0:06:15.839 --> 0:06:19.279 whether it's rest or solidity. You know, those are those 0:06:19.400 --> 0:06:22.640 those types of skills are in demand. So yeah, I mean, 0:06:22.680 --> 0:06:25.880 I think even though the broader picture is pretty bleak, 0:06:26.120 --> 0:06:28.480 like you said, there are these pockets of hope where 0:06:28.920 --> 0:06:31.120 you know, there are companies that are still hiring, still 0:06:31.160 --> 0:06:34.840 looking for people. Let's talk about some of the companies 0:06:34.880 --> 0:06:38.040 that have laid a lot of folks off. So you know, 0:06:38.360 --> 0:06:41.720 we've we have this running tally of job cuts, not 0:06:41.760 --> 0:06:43.880 just in crypto or colleagues in tech have one for 0:06:44.200 --> 0:06:46.599 you know, tech layoffs, our colleagues on on finance, like 0:06:46.600 --> 0:06:48.800 these are the biggest banks that have had layoffs. But 0:06:48.960 --> 0:06:51.800 the names for crypto, you know, it's like blockchain dot 0:06:51.839 --> 0:06:54.640 Com twenty percent at one point, coin Base twenty percent 0:06:54.720 --> 0:06:58.200 at one place, Crypto dot Com twenty percent, Silver Gates 0:06:58.320 --> 0:07:00.400 Crypto Friendly bank that's very much in the news at 0:07:00.400 --> 0:07:04.279 the moment, forty percent, Genesis thirty percent. One of my 0:07:04.360 --> 0:07:07.920 questions for you is, you know, we talked up several 0:07:07.960 --> 0:07:11.440 months ago at this point that these companies started with 0:07:11.520 --> 0:07:13.960 departures at the top. It was like the summer of 0:07:14.040 --> 0:07:19.040 executive departures at crypto CEOs. We're leaving CEOs, We're leaving 0:07:19.120 --> 0:07:22.960 managing directors, we're leaving or being asked to leave, or 0:07:23.000 --> 0:07:26.120 seizing the opportunity to spend time with their families. Have 0:07:26.360 --> 0:07:29.800 these layoffs filtered down into the ranks or are they 0:07:29.800 --> 0:07:32.240 still kind of concentrated in more senior people. From what 0:07:32.320 --> 0:07:35.640 you can tell, I think it's been a trickle down. 0:07:35.960 --> 0:07:38.960 You know that this this is affecting just your regular 0:07:39.000 --> 0:07:41.840 employee who is checking their email in the morning and 0:07:41.960 --> 0:07:45.960 might not know whether there's a letter there about them leaving. 0:07:46.560 --> 0:07:51.239 So it's it's something that's affecting all ranks within companies, 0:07:51.240 --> 0:07:53.840 and it's also affecting people with technical talent too. It's 0:07:53.880 --> 0:07:57.040 not just you know, your marketing folks or you know, 0:07:57.120 --> 0:08:00.679 the comms team or whatever. It's something that's that's hitting 0:08:00.680 --> 0:08:05.640 people at all levels, at all different types of backgrounds. 0:08:06.000 --> 0:08:10.520 So it's it's it'll be interesting to see going forward, 0:08:10.720 --> 0:08:15.200 you know, how crypto exacts are gonna handle this. You know, 0:08:15.360 --> 0:08:18.080 in some cases some of these companies have brand new leadership. 0:08:18.320 --> 0:08:21.200 Who are you know, figuring out the ropes, you know, 0:08:21.240 --> 0:08:25.520 trying to leave these companies forward. But yeah, it's definitely 0:08:25.640 --> 0:08:27.560 something that we're keeping a close eye on as we 0:08:28.080 --> 0:08:32.240 report on the industry. In addition to companies that have 0:08:32.320 --> 0:08:35.199 big operations in the United States, you've also been reporting 0:08:35.200 --> 0:08:38.360 on folks based in Asia, for example, one of them 0:08:38.400 --> 0:08:42.240 being Amber Group, who were in that category of having 0:08:42.640 --> 0:08:47.520 you know, laid off forty percent of its workforce, scrapped bonuses, 0:08:47.760 --> 0:08:51.959 had managers take salary cuts. I think they canceled a 0:08:51.960 --> 0:08:56.000 sponsorship deal they had with CHELSEAFC. Is it that this 0:08:56.080 --> 0:08:58.280 is a kind of a global problem. Are there any 0:08:58.320 --> 0:09:02.319 geographies that have been hit harder and others? Yeah, it's 0:09:02.360 --> 0:09:05.600 been interesting to see in Asia what's been happening there, 0:09:05.679 --> 0:09:11.439 because the crypto regulatory environment in some ways is advancing 0:09:11.480 --> 0:09:14.080 further there. You know, we've actually seen a reversal in 0:09:14.120 --> 0:09:16.679 Hong Kong, you know, in terms of their crypto policies, 0:09:16.679 --> 0:09:21.120 they're actually becoming a little bit more friendly digital assets. Um. 0:09:21.320 --> 0:09:24.439 You know, Singapore is still a hotbed for for crypto activity. 0:09:24.920 --> 0:09:28.439 But yeah, I mean geographies that have been hit hard. Um, 0:09:29.480 --> 0:09:31.880 you know, Asia has definitely seen some layoffs. I mean 0:09:31.920 --> 0:09:35.480 coin Base, for example, is winding down operations in its 0:09:35.600 --> 0:09:40.280 Japan office. Europe has also been hit hard. I remember 0:09:40.640 --> 0:09:44.480 with Amber the layoffs that were happening there. They were 0:09:44.520 --> 0:09:48.200 hitting Europe first before going to you know, the their 0:09:48.200 --> 0:09:52.920 offices in Asia, and with Amber specifically, it's been very interesting. 0:09:53.160 --> 0:09:54.600 I mean, this is a company that's raised a lot 0:09:54.600 --> 0:09:57.400 of money over the years. For them, they grew very 0:09:57.520 --> 0:10:00.040 very quickly, and kind of where they're at now a 0:10:00.360 --> 0:10:03.480 sort of is reversal. They're back to their roots in 0:10:03.480 --> 0:10:06.080 a way because it's a much smaller workforce that they're 0:10:06.120 --> 0:10:08.600 dealing with. It's like two to three hundred people versus 0:10:08.720 --> 0:10:10.960 more than a thousand when they were at their height. 0:10:11.480 --> 0:10:13.280 So I think for some of these companies, they grew 0:10:13.360 --> 0:10:16.959 super quickly, built out their teams, you know, hired everyone 0:10:17.160 --> 0:10:19.520 when you know there was a bolt when there was 0:10:19.559 --> 0:10:22.720 a bowl market, and now they're sort of reconsidering things 0:10:22.760 --> 0:10:25.480 and saying, hey, maybe I did grow a little too 0:10:25.520 --> 0:10:28.760 fast and going back to basics. We'll be right back 0:10:28.800 --> 0:10:40.240 with more from Bloomberg report. To Hannah Miller, one of 0:10:40.280 --> 0:10:46.200 the Capital d discourse things that are happening right now, 0:10:46.240 --> 0:10:51.440 as it relates to layoffs at places like Meta and Twitter, 0:10:51.960 --> 0:10:55.720 is this idea of tech companies and so so it's 0:10:55.720 --> 0:10:57.760 an extent crypto company is trying to get rid of 0:10:57.800 --> 0:11:01.960 middle managers, right and there's this narrative about middle managers. 0:11:02.000 --> 0:11:03.960 They just like send emails all day. They're not really 0:11:03.960 --> 0:11:06.720 doing the real work of so calls like engineers. And 0:11:06.760 --> 0:11:10.400 they're also not the senior executives making the decisions about things. 0:11:11.559 --> 0:11:15.120 The folks who are say middle managers, will often point 0:11:15.120 --> 0:11:16.880 to the fact of like, Okay, well, we are the 0:11:16.920 --> 0:11:20.160 primary coordinators of the big ideas that are coming down 0:11:20.160 --> 0:11:21.960 from the C suite and the people who have to 0:11:21.960 --> 0:11:24.200 make them happen. Like we're helping people prioritize, we're helping 0:11:24.200 --> 0:11:29.160 people ship. Have you seen other cycles where layoffs look 0:11:29.240 --> 0:11:33.240 like they're being used to like flatten the hierarchy of 0:11:33.280 --> 0:11:37.200 companies And do these companies tend to reintroduce hierarchy in 0:11:37.280 --> 0:11:40.800 boom times or are we seeing something really different now? Yeah, 0:11:40.800 --> 0:11:43.439 I mean I think in the past there was you know, 0:11:44.200 --> 0:11:47.680 companies that gravitated towards flat structure. I remember there's some 0:11:47.679 --> 0:11:50.360 cryptoc companies say they didn't even have like formal titles. 0:11:50.400 --> 0:11:53.800 You know, they wanted to have this sense of camaraderie, 0:11:54.080 --> 0:11:57.600 you know that everybody's equal. It's just about building, it's 0:11:57.600 --> 0:12:01.000 not about where you rank. But I think the fact 0:12:01.040 --> 0:12:04.520 of the matter is that you know, companies like Twitter 0:12:05.320 --> 0:12:09.840 are now dealing with these changing structures that they want 0:12:09.920 --> 0:12:15.320 to just streamline everything and you know, cut out who 0:12:15.320 --> 0:12:17.760 they can and yeah, the middle manager is going to 0:12:17.840 --> 0:12:23.520 be a good target for that. So looking ahead, it'll 0:12:23.520 --> 0:12:25.320 be interesting to see whether in the crypto space that 0:12:25.320 --> 0:12:28.400 they kind of go back to tradition and having a 0:12:28.440 --> 0:12:33.800 more structured environment just to to maybe put things in 0:12:33.880 --> 0:12:37.200 perspective as they sort of write a ship here. But 0:12:37.760 --> 0:12:40.480 I think corporate structure is very interesting and right now 0:12:40.520 --> 0:12:42.440 in tech and crypto, there are a lot of models 0:12:42.440 --> 0:12:44.600 for it, so it'll be interesting to see which ones 0:12:44.920 --> 0:12:50.000 survive and thrive. And to that point about there being 0:12:50.520 --> 0:12:53.319 a lot of models, you know, it seems like the 0:12:53.360 --> 0:12:56.520 most consistent narrative we're hearing from a lot of crypto 0:12:56.559 --> 0:13:01.600 companies is one we're excited about hiring is eineers. Two, 0:13:01.840 --> 0:13:05.880 we're looking for growth opportunities outside of the United States, 0:13:06.240 --> 0:13:09.480 And in those conversations various folks have mentioned opportunities in 0:13:09.520 --> 0:13:13.920 the UE and buy for example. And three this idea 0:13:14.120 --> 0:13:18.360 to your point of like focus right like really picking 0:13:18.520 --> 0:13:22.240 an area of expertise, perhaps not launching an NFT marketplace 0:13:22.240 --> 0:13:24.800 that no one is asking for and really trying to 0:13:24.880 --> 0:13:29.280 identify what those core strengths are. You also report a 0:13:29.360 --> 0:13:32.880 lot on the VC side of this question. Are you 0:13:33.040 --> 0:13:36.959 seeing kind of a similar narrowing of focus on the 0:13:37.040 --> 0:13:39.400 VC side? You know, you mentioned security earlier in terms 0:13:39.400 --> 0:13:42.080 of themes that they might be excited about. Is anything 0:13:42.120 --> 0:13:45.840 changing about their approach? Yeah, well, the pace of deals 0:13:45.960 --> 0:13:48.840 is just slowed in general. You know, vcs are taking 0:13:48.840 --> 0:13:52.800 their time more when they're looking at companies, you know, 0:13:53.040 --> 0:13:56.680 whether they want to invest in them. And the other 0:13:56.720 --> 0:13:59.439 thing too, is that they're looking for more traditional things 0:14:00.000 --> 0:14:03.360 on a board seat, you know, they they want their 0:14:03.440 --> 0:14:06.040 you know, they want some sort of oversight to be 0:14:06.080 --> 0:14:10.080 in place, you know. So so those things you're seeing 0:14:10.080 --> 0:14:13.680 a return to traditional values um in in venture capital 0:14:13.720 --> 0:14:16.960 when it comes to investing in crypto And yes, I 0:14:16.960 --> 0:14:21.880 would say there's you know, some increased specialization. You know 0:14:21.920 --> 0:14:25.800 that they're looking for companies that maybe just want to 0:14:25.880 --> 0:14:29.920 narrow the focus to in you know, infrastructure or you know, security, 0:14:30.040 --> 0:14:33.760 or maybe they're you know, specifically into gaming, NFTSUM. But 0:14:33.840 --> 0:14:37.520 at the same time, I have seen some vcs gravitate 0:14:37.600 --> 0:14:42.200 towards other industries, including artificial intelligence, because that's obviously really 0:14:42.240 --> 0:14:43.920 hot right now. So, like I remember, I was talking 0:14:43.920 --> 0:14:46.200 to a VCS like, yeah, like we want to hire 0:14:46.240 --> 0:14:49.360 someone who can do AI, you know, and just the 0:14:49.360 --> 0:14:53.880 whole planning by themselves, yes, you know. So it's I 0:14:54.160 --> 0:14:57.160 think they're also sort of spreading their bets as as well, 0:14:57.240 --> 0:14:59.600 even though they want the companies they invest in to 0:14:59.720 --> 0:15:03.600 be more specialized. Yeah, what was the thing that folks 0:15:03.600 --> 0:15:05.520 at Andrews and Harrowitz used to say before they blocked 0:15:05.560 --> 0:15:07.680 all the journalists on Twitter? Software will eat the world. 0:15:08.520 --> 0:15:10.400 Maybe it'll be AI will eat the world, and we'll 0:15:10.400 --> 0:15:12.920 see how well that turns out. So more to come 0:15:12.960 --> 0:15:14.960 on that topic, I'm sure. Thank you so much, Hanna, 0:15:15.200 --> 0:15:19.080 Thank you. That was Bloomberg Report Hannah Miller. You can 0:15:19.120 --> 0:15:21.120 find more of her reporting on the Bloomberg Terminal and 0:15:21.240 --> 0:15:23.600 on Bloomberg dot com, and be sure to check out 0:15:23.600 --> 0:15:32.280 our twice weekly crypto news leto Bloomberg Crypto. This is 0:15:32.320 --> 0:15:36.720 Bloomberg Crypto, a daily podcast from Bloomberg and iHeartRadio. For 0:15:36.840 --> 0:15:40.880 more shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, 0:15:41.080 --> 0:15:45.000 or wherever you get your podcasts. Send us your comments, questions, 0:15:45.040 --> 0:15:48.120 or suggestions. For the show to Crypto at Bloomberg dot Net. 0:15:51.320 --> 0:15:55.040 The supervising producer of Bloomberg Crypto is Vicky Vergalina. Our 0:15:55.080 --> 0:15:58.920 senior producer is Janet Babin. Our producers are Mohammed Farouk 0:15:58.960 --> 0:16:02.360 and Sharon Barrero. Our associate producers are Ty Butler and 0:16:02.440 --> 0:16:06.720 Moses on um Desta wonder At is our engineer. Original 0:16:06.800 --> 0:16:12.200 music by Leo Sidron. I'm Stacy Mariaschmael. We'll be back tomorrow.