Layoff Chronicles: Binance Joins Major Companies in Workforce Reductions

The persistent wave of layoffs that unfolded across numerous United States (US) companies towards the end of 2022 shows no signs of abating as we progress into 2023. In the midst of a federal investigation, Binance has joined the ranks of companies implementing substantial workforce reductions. Recent weeks have witnessed over 1,000 individuals being let go from Binance, amplifying the magnitude of these cuts.

Binance Hit on All Fronts
Importantly, it is worth noting that Binance had already been considering staff reductions prior to the Securities and Exchange Commission's (SEC) lawsuit. And in March, Binance was sued by the US Commodity Futures Trading Commission (CFTC) and its founder Changpeng Zhao (CZ), for alleged violations of derivatives regulations.

The latest report on 17 July by Wall Street Journal pointed out that Binance has implemented cost-cutting measures that have affected employee benefits as of June 19. From license snubs to regulatory turmoil, it seems like the crypto exchange is going through an all-out war despite its CEO’s carefree and anti-FUD attitude.

Industrial Giants from Multiple Sectors on the Layoff Wave
In a year marked by economic challenges and stagnant sales, numerous major corporations have undertaken substantial workforce reductions, and the trend shows no signs of abating. Tech giants such as Meta and Google, as well as financial powerhouses like Goldman Sachs, announced sweeping layoffs in the early weeks of 2023. These downsizing efforts build upon significant staff reductions made by companies like Meta and Twitter in the previous year. More recent layoffs include notable firms like Niantic, Robinhood, Grubhub, Spotify, Gap, FedEx, and countless more.

The impact of these layoffs has been particularly pronounced in the tech sector, which is currently experiencing employee attrition at an accelerated pace compared to any period during the pandemic.

The latest data from Layoffs.fyi, a website that monitors workforce reductions since the onset of the pandemic, reveals a striking trend ─ in 2023, tech companies have implemented a significant number of layoffs, surpassing previous years by a substantial margin. The numbers speak volumes, with over 211,000 job cuts recorded in the tech sector in 2023 alone.

By comparison, the figures for layoffs between March and December 2020 stood at 80,000, while 2021 saw 15,000 job reductions. The list below shows the top 20 companies with layoffs in reverse chronological order.

Some ‘Heartbreaking’ Notable Job Cuts Thus far
Binance is the latest victim on the layoff-chopping board but there were numerous companies that came right before it.

1. Circle
Just last week, Circle has undertaken a strategic measure to enhance its financial position by implementing a workforce reduction. According to Circle, this staff cut will enable the company to sharpen its focus on core business activities and execution, "We have reduced or ended investments in non-core activities and reduced operational expenses which includes a marginal reduction in headcount.”

2. Dapper Labs
In a bid to streamline operations and optimise its business structure, Dapper Labs has also implemented another round of layoffs last week, emphasising its commitment to maintaining strong capitalisation for both the company and its blockchain platform, Flow. CEO Roham Gharegozlou took to Twitter on Thursday to announce that Dapper Labs had parted ways with 51 employees, encompassing both full-time staff members and C1 contractors. These staff reductions follow a previous round of layoffs in February, where 20% of the workforce was affected, and another instance in November 2022, which resulted in a 22% reduction of the company's employees.

3. Niantic
On 29 June, Niantic CEO John Hanke delivered news of significant changes within the AR gaming company. Regrettably, he revealed that approximately 230 employees would be impacted by upcoming layoffs. These workforce reductions are accompanied by strategic decisions, including the sunset of the basketball game "NBA All-World" and the halt of development for the unreleased superhero game "Marvel: World of Heroes." Additionally, Niantic has made the difficult choice to close one of its studios located in Los Angeles.

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4. Robinhood
Approximately 150 full-time employees, constituting roughly 7% of Robinhood's workforce, are expected to be affected by job cuts as reported end-June. This comes as an addition to the more than a thousand positions the company has already eliminated since the previous year.

In an internal company message, Jason Warnick, Robinhood's Chief Financial Officer, explained that these layoffs are a measure taken to "adjust to volumes and to better align team structures." Remarkably, this marks the third instance of workforce reduction that Robinhood has undergone since last year.

In 2022, the company implemented two rounds of layoffs in April and August, resulting in the elimination of over a thousand positions from its workforce of 3,800 at the time. The company cited these prior layoffs as necessary actions to streamline costs and address duplicate roles that arose from its rapid hiring.

5. Ford
Ford has announced impending layoffs that are expected to primarily affect engineering positions based in the US and Canada. However, specific details regarding the number of employees impacted by these layoffs were not disclosed. In a statement, a Ford spokesperson confirmed that the engineering roles in the US and Canada would bear the brunt of the layoffs. These recent workforce reductions are aligned with Ford's overarching growth strategy, known as Ford+, which was introduced in 2021.

This comes after the company's previous reduction in workforce. Last August, Ford implemented layoffs impacting approximately 3,000 employees. These measures were part of the company's strategic initiatives to realign its focus towards electric vehicles.

6. Spotify
On 5 June, Spotify made the decision to lay off approximately 200 employees, representing 2% of its workforce. These layoffs will impact various areas of Spotify's operations, including its podcasting business, as well as supporting functions such as talent acquisition and financial roles.

In a memo addressed to employees, Sahar Elhabashi, the vice president of Spotify's podcast business, provided further context for the layoffs. He explained that the decision to change how Spotify collaborates with podcast partners worldwide necessitated these workforce reductions. The memo emphasised that this strategic shift away from a more uniform approach would enable Spotify to better support the creator community.

Notably, this announcement follows previous layoffs that Spotify implemented in January, when CEO Daniel Ek shared in a memo that the company would be reducing its staff by 6%, amounting to approximately 600 employees.

The Layoff Wave that Sees no Signs of Abating
As ludicrous as it sounds, it seems like the layoff spree kicked off after collapse of FTX. As of now, it looks like no sector has been spared, from crypto to finance, tech, retail, F&B, and others.

This compels us to explore the broader landscape of workforce changes and their implications. What factors are driving this continued wave of layoffs, and how will these decisions shape the future trajectories of these companies and the industries they operate in? Understanding these dynamics is crucial to grasp the evolving employment landscape and its wider ramifications.