Author: CoinDesk

Translation: Deep Tide TechFlow

Deep Tide Overview: Algorand, Gemini, Crypto.com, and OP Labs have successively laid off employees in recent weeks, citing half of the reasons as "poor macro environment" and the other half as "AI replacing manpower."

However, a founder of a crypto recruitment agency pointed out directly: these layoffs have little to do with AI and are more like the collective contraction of the entire sector—restaking, DePIN, L2.

The channel blogger reminds that the actual number of layoffs is much higher than the publicly announced figures.

The full text is as follows:

Key Points

• Algorand, Gemini, Block, Crypto.com, OP Labs, PIP Labs, and Messari have all recently laid off employees
• The reasons given by various companies range from low token prices to AI integration
• Messari has completed three rounds of layoffs since 2023, reducing its workforce from a target of 1,000 to about 140

On Wednesday, the Algorand Foundation joined the ranks of crypto company layoffs, cutting 25% of its team of fewer than 200, citing "uncertain global macro environment" and a broader downturn in the crypto market.

This layoff comes amid a wave of layoffs in the industry. In February, Gemini Space Station announced a reduction of around 200 positions, accounting for a quarter of its total employees, which expanded to 30% by mid-March. On Thursday, Crypto.com announced it would reduce 12%, about 180 positions.

Previously, OP Labs, which builds the L2 blockchain Optimism, laid off 20 employees earlier this month, while PIP Labs, behind Story Protocol, cut 5 full-time employees and 3 contractors, accounting for 10% of its total workforce. Crypto data provider Messari, which now self-identifies as an AI-first company, announced its third round of layoffs since 2023 along with the announcement of a CEO change but did not disclose specific numbers.

The official explanations from these companies vary. Algorand points directly to macro conditions and low token prices, but many companies classify the layoffs as a transition towards more AI usage in workflows.

"AI is now too powerful; Gemini cannot afford not to use it," the company stated in a letter to shareholders. "Not using AI at Gemini will soon be comparable to coming to work with a typewriter instead of a laptop."

"We are joining the ranks of companies integrating AI enterprise-wide," a spokesperson from Crypto.com said to CoinDesk on Thursday, noting that efficiency improvements have led to a reduction in required staff. CEO Kris Marszalek stated on X that companies failing to transition towards AI integration will fail.

The layoffs at Algorand reportedly affected community management and business development positions, not roles that could be visibly replaced by AI. Fairly, the company attributes the reasons to the broader crypto environment. Its ALGO token is recently trading at around $0.09, down 98% from its peak in 2019. The market's largest cryptocurrency, Bitcoin, has fallen 20% this quarter.

Industry Consolidation

Industry observers point to broader consolidation dynamics. The entire once-talent-abundant crypto sector—such as restaking, DePIN, and L2—has significantly shrunk, while mergers and acquisitions have also intensified redundancies, with employees from acquired companies replacing existing staff.

"I have not seen any real signs that these layoffs are related to large-scale AI workforce replacement," said Dan Escow, founder of the crypto recruitment agency Up Top. "The entire sectors of restaking, DePIN, and L2, which once had strong talent, are now basically nonexistent. Companies are forced into cost-cutting mode, trying to buy time to figure out how to proceed next."

The broader hiring picture supports this assessment. In January, the number of new job postings on major crypto job sites was approximately 6.5 per day, a decrease of about 80% compared to the same period last year.

The companies mentioned in this article—excluding Messari, which did not disclose numbers—have announced around 450 job cuts within weeks. This may just be the tip of the iceberg. During the crypto winter of 2022, CoinDesk tracked over 26,000 job losses throughout the year, a figure that took months to gradually manifest.