Crypto Hardware Manufacturer Ledger Cuts Workforce By 12%

Cryptocurrency hardware wallet manufacturer Ledger has decided to cut its workforce by 12%, amounting to around 90 employees, according to the company's LinkedIn page.

The decision is attributed to the ongoing crypto winter, marked by a significant downturn in the cryptocurrency market over the past year.

Ledger, a major player in the crypto hardware wallet space, joins the list of companies in the industry that have been forced to reduce their staff due to adverse market conditions.

The years 2020 and 2021 witnessed tremendous growth in the cryptocurrency industry, with flagship assets like Bitcoin (BTC) and Ethereum (ETH) reaching all-time highs. Altcoins and non-fungible tokens (NFTs) also experienced substantial market capitalization during this period.

However, the crypto landscape took an unexpected turn in 2022 as central banks implemented measures such as aggressive rate hikes and liquidity tightening to address global inflationary pressures. These actions, along with specific incidents like the collapse of the Terra ecosystem and FTX bankruptcy, contributed to a significant setback in the once-booming 2020–2021 crypto bull market.

The impact of the market downturn is evident in various key indicators. Bitcoin, for example, is still 60% below its all-time highs from 2021, and many major altcoins have seen declines of over 90%. Decentralised Finance (DeFi) markets have also contracted, with the total value locked (TVL) across all chains dropping to $78 billion, compared to over $300 billion in late 2021. Additionally, spot transaction volumes on global exchanges have hit all-time lows since late 2020, registering just over $300 billion in September, down from over $4 trillion in May of the same year.

The challenging market conditions have led to a significant decrease in the earnings of various crypto companies. Ledger's decision to reduce its workforce aligns with the broader trend in the industry, with approximately 30,000 crypto industry personnel laid off between April 2022 and March 2023, and the likelihood of this number increasing in subsequent months.

Ledger's CEO, Pascal Gauthier, communicated the layoffs to the staff in a letter, attributing the decision to macroeconomic headwinds, the current crypto bear market, and the aftermath of previous collapses in the market. Despite the challenges, Gauthier expressed confidence in the company's ability to emerge stronger from this period and highlighted ongoing sales of Ledger's crypto wallets. Ledger had previously secured a $109 million Series C funding round in March, valuing the company at $1.4 billion.

The crypto hardware wallet provider has also faced controversies and challenges in recent years, including server breaches that exposed customer information, criticism of its Ledger Recover service, and backlash for promoting a necklace product as part of the Ledger Nano X OnChain crypto wallet.

Ledger's layoffs are not an isolated incident within the crypto industry. Other notable companies, including Chainalysis, Chia Network, Binance.US, and R3, have also implemented staff reductions in response to the sustained downturn. The challenging market conditions have prompted a contraction in the crypto job market, impacting companies across various sectors within the industry.