Protocol Labs, creator of decentralized storage network Filecoin, is joining a growing list of cryptocurrency and Web 3.0 firms to cut staff, as the industry continues to “weather crypto winter” intensified by the FTX collapse and macroeconomic factors.
Juan Benet, chief executive officer of Protocol Lab, said in a Friday blog post that the company is cutting 89 jobs, or about 21% of its staff. He did not specify if the Filecoin team will be affected.
“This has been an extremely challenging economic downturn, world-wide and especially in crypto,” Benet wrote. “High inflation leading to high interest rates, low investment, and tougher markets have rocked companies and industries globally. The macro winter worsened crypto winter, making it more extreme and potentially longer than our industry expected.”
Benet said Protocol Labs has “significantly cut costs” over the last few quarters to “weather the macro and crypto winter.”
In January this year, there were at least 2,806 layoffs in the crypto industry, matching 41% of total crypto job cuts in 2022, according to a report published last week by crypto data aggregator CoinGecko. The report collected data from tech startup tracker Layoffs.fyi and public reports.
CoinGecko said in its report that industry layoffs are expected to top last year’s total.
Also in January, ConsenSys, the Ethereum software firm behind crypto wallet MetaMask, announced its plans to cut at least 100 employees, according to a CoinDesk report that cited sources familiar with the matter.
Coinbase, the largest cryptocurrency exchange in the U.S., also announced last month that it would be letting go of around 950 employees, or about 20% of its workforce, as part of “a further restructuring plan,” which is expected to be “substantially complete” by the second quarter of 2023.
The job cuts in the crypto space come in line with a broader layoff trend in the technology sector. In 2022, crypto accounted for 4.3% of the total layoffs in the tech industry, ranking it 10th in the sector, the CoinGecko report said.
“This remained largely unchanged in 2023, with crypto making up a slightly smaller 4.0% of January 2023 tech layoffs, and still holding the 10th position based on cumulative numbers,” the report added.