Circle begins layoffs despite expansion plans in Asia
Circle, the issuer of the second-largest stablecoin by market capitalization, has made the tough decision to downsize its workforce in response to a turbulent year for the digital asset industry.
While the specific reasons for the reported layoffs are currently uncertain, there are several factors that could have influenced the decision. The so-called crypto winter and unfavorable market conditions have apparently impacted the revenue and profitability of Circle, potentially leading to adjustments in their workforce.
Describing the job cuts as a mere marginal reduction in headcount, Circle said that this move is part of a broader strategy to curtail operational expenses and discontinue investments in non-core activities. The company is also carrying out these layoffs to sharpen its focus and allocate resources more efficiently, all while adapting to the ever-evolving landscape of the digital asset industry, it said.
Circle’s recent decision to reduce its workforce has caught many off guard, considering the previous statements made by the company’s finance chief, Jeremy Fox-Green. Earlier this year, Fox-Green said they plan to expand the company’s headcount by a margin ranging from 15% to 25% by the year’s end.
Despite the unexpected workforce reduction, Circle clarified that it is actively seeking talent for “key areas of focus,” indicating its dedication to strategic recruitment efforts. This move suggests that while Circle has taken measures to optimize its operations, it remains resolute in pursuing its long-term goals amidst the evolving landscape of the digital asset industry.
The Boston-based stablecoin issuer said last week it is mulling the release of a fiat-backed cryptocurrency in Japan under the new legislation that came into effect last month.
Circle CEO Jeremy Allaire, in an interview with CoinDesk Japan, said he believes that Japan has the potential to become a key market for their products. Additionally, the company received in June its major payment institution (MPI) license for digital payment token (DPT) services from the Monetary Authority of Singapore (MAS).
Circle isn’t alone in dealing with the effects of crypto’s collapse. Many other platforms slashed hundreds of jobs amid huge withdrawals and regulatory scrutiny after the implosion of FTX. The cuts were also prompted by macroeconomic and geopolitical factors, which muted customer demand, lowered trading volumes and cut sign-ups.
On top of those pieces of news was Binance, which had reportedly begun a series of job cuts in June. The world’s largest crypto exchange, which currently employs roughly 8,000 individuals, might have reduced its workforce by approximately 20%.
Coinbase alos cut about 950 jobs, or 20% of its workforce. That was its third round of layoffs in less than a year. Kraken followed Coinbase’s move and let 30% of its workforce let to go, around 1,100 of its employees.