Crypto Industry Lays Off Hundreds Over Weeks, AI and Bear Market Used as Excuses

Author: CoinDesk

Translation: Deep Tide TechFlow

Deep Tide Summary: Algorand, Gemini, Crypto.com, and OP Labs have all laid off employees within weeks. Official reasons cite “poor macroeconomic environment” and “AI replacing human labor.”

However, a founder of a crypto recruitment agency directly pointed out: these layoffs are not mainly related to AI but are more a result of the overall sector—restaking, DePIN, L2—collectively shrinking.

Channel bloggers warn that the actual number of layoffs is much higher than publicly reported.

Full text below:

Key Points

Algorand, Gemini, Block, Crypto.com, OP Labs, PIP Labs, and Messari have recently laid off staff.

Reasons given by companies range from token price downturns to AI integration.

Messari has completed three rounds of layoffs since 2023, reducing staff from a target of 1,000 to about 140 now.

Algorand Foundation joined the wave of crypto layoffs on Wednesday, cutting 25% of its team of less than 200, citing “uncertain global macroeconomic conditions” and broader crypto market downturn.

This round of layoffs coincides with a spreading industry trend. In February, Gemini Space Station announced about 200 layoffs, accounting for a quarter of its staff, which grew to 30% by mid-March. On Thursday, Crypto.com announced a 12% cut, about 180 positions.

Earlier, OP Labs, which builds the L2 blockchain Optimism, laid off 20 employees earlier this month. PIP Labs, behind Story Protocol, cut 5 full-time employees and 3 contractors, accounting for 10% of its staff. Messari, a crypto data provider now positioning itself as an AI-first company, announced its third round of layoffs this year alongside a CEO change, but did not disclose specific numbers.

Official explanations vary. Algorand directly cited macroeconomic conditions and token price declines, but many companies frame layoffs as part of a transition toward more AI integration in workflows.

“AI is now so powerful that Gemini can’t avoid it,” the company stated in a letter to shareholders. “Not using AI at Gemini will soon be like working with a typewriter instead of a laptop.”

“We are joining the ranks of companies fully integrating AI across the enterprise,” a Crypto.com spokesperson told CoinDesk on Thursday, noting efficiency gains reducing staffing needs. CEO Kris Marszalek said on X that companies not transitioning to AI integration will fail.

Algorand’s layoffs reportedly affected community management and business development roles, not positions clearly replaced by AI. To be fair, the company attributes the reasons to the broader crypto environment. Its ALGO token recently traded around $0.09, down 98% from its 2019 high. Bitcoin, the largest crypto by market cap, has fallen 20% this quarter.

Industry Consolidation

Industry observers point to broader consolidation trends. The once talent-rich sectors—restaking, DePIN, and L2—have significantly shrunk, and M&A activity has increased redundancies, with acquired companies’ employees replacing original staff.

“I haven’t seen any real signs that these layoffs are mainly due to large-scale AI workforce replacement,” said Dan Escow, founder of crypto recruitment firm Up Top. “The entire sectors of restaking, DePIN, and L2, which once had strong talent pools, are basically gone. Companies are forced into cost-cutting modes, trying to buy time to figure out their next steps.”

The broader hiring landscape supports this view. In January, new job postings on major crypto recruitment sites averaged about 6.5 per day, down roughly 80% from the same period a year earlier.

Just the companies mentioned in this article—excluding undisclosed figures like Messari—have announced about 450 layoffs in recent weeks. This may only be the tip of the iceberg. During the 2022 crypto winter, CoinDesk tracked over 26,000 job losses throughout the year, a figure that took months to fully surface.