OpenSea layoff 20% of its employees amid market crisis

The wave of layoffs in the cryptocurrency market hit OpenSea, which announced the layoff of 20% of its staff. According to the NFTs trading platform, the measure serves as a way to prepare the company for an eventual “crypto winter”.

Since the beginning of the year, the cryptocurrency market has lost a lot of value, which has affected the profitability of the companies themselves. As a result, exchanges and other platforms decided to cut costs to avoid problems – and OpenSea followed suit.

“The reality is that we have entered an unprecedented combination of crypto winter and widespread macroeconomic instability, and we need to prepare the company for the possibility of a prolonged downturn,” CEO Devin Finzer wrote in a note to the team.

Layoff to prosper?

Finzer regretted having to make the layoffs, but said he believed it was the best solution for the market moment. With the cuts, the CEO estimates that OpenSea can withstand up to five years of downturn in the market.

In addition, the CEO said that the cut is drastic, but that it will probably be the only one, as the economy will allow the platform not to have to make new layoffs in the short term.

OpenSea joins a number of cryptocurrency companies that have laid off employees or stopped hiring in recent months. Platforms like Gemini, Coinbase, Crypto.com and Huobi have announced layoffs recently.

Other platforms didn’t even have time to lay off people, as the crisis hit them hard. As Cryptheory reported, about 25 exchanges closed their doors in the last 30 days because of the crisis. In other words, almost one exchange a day filed for bankruptcy during this bear market.

Unfavorable macro conditions

But it wasn’t just falling prices that hurt exchanges, but macroeconomic conditions as well. Rising interest rates in the United States drove many investors away from the market and lowered the fees earned by exchanges.

In fact, virtually every major exchange listed on the CoinMarketCap recorded strong losses in their volumes. With less volumes, exchanges receive less in trading fees, which hurts the profitability of many of them.

Coinbase, for example, laid off 1,100 employees, or about 18% of its workforce. In addition, it stopped hiring in several markets, although it maintained expansion plans for Brazil.

Speaking of Brazil, platforms like Mercado BTC also reduced personnel expenses through layoffs. Other platforms on the market, such as the BlockFi lending platform, have also made staff cuts.