USDC issuer Circle has announced its plan to increase its workforce by 15–25% in 2023 amid a sea of layoffs across the cryptocurrency industry.
Industry-Wide Layoffs in the Cryptocurrency Sector
This decision comes as a surprise, given that many other firms in the industry are laying off staff to mitigate their financial difficulties.
According to The Wall Street Journal, the cryptocurrency industry has seen a significant number of layoffs in 2023, with 41% of all layoffs coming from this sector. Major cryptocurrency firms that have made significant employee cuts include Polygon, Chainalysis, Bittrex, Huobi, Crypto.com, Coinbase, Gemini, Genesis, and Wyre.
One of the reasons behind the layoffs in the cryptocurrency industry was the prolonged crypto winter and several crypto implosions that wiped out billions from the balance sheets of numerous associated companies. However, these large-scale layoffs were not isolated incidents. In January 2023, just four companies, Google, Amazon, Microsoft, and Salesforce, let go of around 48,000 people.
Circle’s Decision to Expand Workforce and Delay Public Debut
The decision to increase its workforce comes just months after Circle mutually terminated its plans to go public with the special purpose acquisition company (SPAC), Concord Acquisition. The deal was announced in July 2021 with a preliminary valuation of $4.5 billion, which was later amended in February 2022 when Circle’s valuation ballooned to $9 billion. However, Circle’s chief financial officer, Jeremy Fox-Geen, stated that they still intend to go public but are waiting for better market conditions.
Fox-Geen also added that the crypto industry needs more distance from the Terra and FTX implosions for public-market investors to re-evaluate the future of digital-asset businesses. By the end of 2022, the stablecoin issuer had roughly 900 employees, with plans to increase the headcount by 135–225 in 2023. However, staff numbers are growing slower than they did in 2022, when the headcount more than doubled from 2021.
Circle-issued USDC is currently the second-largest stablecoin behind Tether’s USDT, with a market cap of $42 billion.
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In conclusion, Circle’s decision to expand its workforce during a time when many other firms in the cryptocurrency industry are laying off staff is a bold move. However, with USDC being the second-largest stablecoin, it may be a strategic decision to increase staff to maintain its market position. We will have to wait and see how this decision plays out in the long run.