Crypto industry goes slow on hiring amid market downturn

The downturn in the global crypto market has put India’s web3 industry on edge, with companies wary of hiring. While crypto exchanges in the country claim they will not lay off staff, such as US-based crypto exchange Coinbase, at least four senior executives said the industry is reviewing its hiring plans for the year.

According to executives, crypto firms hold a large portion of their coffers in cryptocurrencies, which have declined in value due to the market downturn. In addition, venture capital-driven companies will have to consider their runways during the recession.

Furthermore, India’s top crypto exchanges have earned millions of dollars in revenue due to high trading volumes, which have fallen amid new government tax regulations. In April, a report by crypto research firm Credit Rating for Exchanges, Blockchains and Coin Offerings (CREBACO) noted that trading volumes in the country had fallen by more than 40% after the government introduced a 30% tax on virtual digital assets.

This decline was exacerbated by the general downturn in the market over the past two months. As Bitcoin, Ether and other major cryptocurrencies hit lows, data from crypto tracking firm Coinmarketcap shows that 24-hour trading volumes on two of India’s largest exchanges, WazirX and CoinDCX, fell by 41.96% and 26.22%, respectively.

While Coinbase’s layoff of 18% of its workforce earlier this week was a direct result of the crypto market’s downturn, Indian exchanges are also foreseeing a second headache that a 1% tax deduction at source (TDS) must be levied on crypto transactions from July 1, which could cause volumes to fall even further.

“Indian exchanges don’t currently have thousands of employees like Coinbase, and they are also largely powered by venture capital funds, which gives them the chance to weather the storm now,” said the founder of one of the leading crypto exchanges. “That said, companies with between 500 and 1,000 employees could be in trouble if trading volumes drop from next month,” he said.

Furthermore, Sidharth Sogani, founder and chief executive of Credit Rating for Exchanges, Blockchains and Coin Offerings (CREBACO), a crypto research firm, said many Indian exchanges are also laying off staff. “They have stopped hiring and they are not spending on marketing or advertising,” he added.

However, Sogani added that this is not a negative moment for the industry. He said companies are “trying to survive the crypto winder and recession” and resigning is a sign that a company has confidence in what it is doing. “Any marketing or advertising in India will not be lucrative as customers are not going to invest now,” he added.

In separate statements, WazirX, CoinDCX and CoinSwitch Kuber all reaffirmed that they have no intention of laying off staff. In fact, WazirX and CoinDCX respectively said they are hiring this year and are “bullish on hiring”. WazirX employs over 250 people while CoinDCX employs 500 people in India.

“As an organization we have always been frugal, even when we made big, daring bets. We’ve been careful every step of the way, whether it’s taking or spending our spending. We are a tight ship and we are also very well capitalized. We will continue to put our people first and honor the offers we’ve made,” said Ashish Singhal, co-founder and CEO of CoinSwitch Kuber, in a statement.

Apart from the exchanges, the crypto bear market is also seen as an opportunity by many Indian web3 companies. The founder of a prominent blockchain company, who asked for anonymity, said salaries for blockchain engineers, proficient in programming languages ​​such as RUST and SmartPy, were driven by global companies. As a result, Indian companies had to pay salaries of up to $150,000 a year for one engineer, who ate on their runway.

These salaries have now started to fall, allowing them to hire skilled engineers at a lower cost. Another founder, based in Delhi, said this could be especially useful for Indian web3 companies competing on a global level as they can now scale faster without worrying about raising new funds regularly.

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