Author: Jia Liu, Zhangsheng BeatZ

"AI is the main reason for our layoffs." This is almost the primary statement from all companies during layoffs today.

In the first half of 2026, nearly 140,000 people were laid off in the U.S. tech industry. Amazon laid off 9% of its employees, while Meta cut 10%. The reasons given for these layoffs were nearly identical: AI is changing everything, and the company must streamline.

In fact, over 56% of layoff events in 2026 explicitly listed AI, automation, or machine learning as the reason. AI has been the top reason for layoffs in American companies for four consecutive months. Ironically, nearly 60% of companies admit that they packaged layoffs or hiring slowdowns as "AI-driven," while the real reason is financial pressure.

The impact of AI is not limited to Silicon Valley; it is reshaping the employment structure of almost all industries. The Web 3.0 industry, as an intersection of technology and finance, has been hit especially hard. Large-scale layoffs in the Web 3.0 sector have been ongoing for more than half a year, and they are exceptionally severe and swift.

Since this year, especially in recent months, news about downsizing, team restructuring, and personnel turnover related to leading trading platforms has been densely appearing on X, Reddit (the foreign version of Zhihu), Xiaohongshu, Maimai, and among professionals in coffee chats. Once a powerful player, BitMEX has almost faded from the mainstream view, while smaller platforms are exiting or shrinking their business lines. With talent and attention being siphoned off by the AI industry, layoffs in the Web 3.0 sector seem to be a necessary option.

The Sword of Damocles Has Fallen

Kevin received his layoff notice just three days before his Last Day.

Kevin had worked at an internet giant for several years before being attracted by the high salaries and narratives of the Web 3.0 industry, and he switched to a leading trading platform. He later discovered that his departure had actually been decided more than a month earlier.

During that period, he hardly felt any signals indicating that layoffs were coming. All work was proceeding normally, meetings were held as usual, and messages were being replied to. Until HR approached him, there was no reasonable explanation, no so-called poor performance situation, but the sword of layoffs still fell on Kevin's head.

Looking back, the only signal was that two others had already left their originally ten-person team before him. At that time, everyone said it was "not a good fit" or "going to look for other easier jobs." "Looking back now, maybe that was when they were already being pushed out," Kevin told Zhangsheng BeatZ.

The layoff method at the trading platform where Richard worked was even more extreme. After being a full-time dad for nine years, he returned to the job market and found work at a not-so-large crypto trading platform. But he, along with many colleagues, was quickly laid off.

He described that one morning, he opened his computer as usual and found that his system access had been revoked. He initially thought it was a technical failure, until he opened the work group and noticed about forty colleagues asking the same question: "Why can't I log into my account?" No one knew what was happening. Confused, panic spread like water in the chat group. Hours later, they received a cold layoff notice in their personal emails, effective immediately.

What chilled Richard even more was something else. Shortly before the layoffs, his leader had hinted that one of his developer colleagues "might need adjustment." Richard was still figuring out ways to help this colleague stay, even rearranging work assignments to prove that this person was irreplaceable. In the end, before he could submit his plan, both of them ended up being laid off.

Another former employee from a crypto trading platform, Xiaoyu, described a similar layoff scene to Zhangsheng BeatZ. At her previous company, the first step of layoffs was to batch disable employees' Slack accounts and cut off email access. "Whenever we saw someone suddenly disappear from Slack, we would rush into private chat channels to share our phone numbers and LinkedIn links," Xiaoyu said, "because we didn't know who would be next to be laid off, and everyone wanted to maintain contact while they still could."

"When the layoff finally came to me, my manager messaged me on Slack to ask if I had time for a call," Xiaoyu said. "Before I could even reply to her, all my permissions were canceled."

Layoffs Like a Tornado

Kevin revealed that in the months following his departure, his team continued to lay off employees, and now only two people remain. The trading platform he was part of cuts about 10% of its workforce each quarter, amounting to a total of 40% over the year.

Coinbase announced global layoffs of about 700 people in May, officially characterized as "AI-native restructuring," accounting for about 14%. However, Zhangsheng BeatZ learned from insiders that the impact on Coinbase's Indian office was far greater than this figure. Some former employees claimed that approximately 90% of the workforce in the Indian office had left, affecting all business departments, not just sales. Only a few engineers deemed the top-tier were invited to relocate to Canada to continue working.

It is said that the main reason for the massive layoffs in the Indian office is the high costs and significant time zone differences with the U.S. Coinbase pays approximately 7.5 million rupees (about CAD 110,000) to Indian SDE2 (mid-level engineers), which is comparable to the salary level of local mid-level engineers in Canada. In many high-paying product companies, Indian architects' salaries are even higher than those of their EU counterparts.

Many trading platforms have been reported to have employees and HR negotiate compensation packages fruitlessly, only to have their last day confirmed on the same day and system access revoked. Additionally, the recently closed trading platform BitMart had whole departments laid off starting in May.

Furthermore, many trading platforms choose to consolidate layoffs at specific time points, which is not coincidental. According to Zhangsheng BeatZ, around June 30 is a peak time for layoffs in the industry. The reason is simple: new financial reports need to be released in July, and this data is to be presented to investors. Laying off a group of workers and compressing expenses improves the appearance of the profit and loss statement immediately. For the management of trading platforms, layoffs are not only about cost reduction but also a form of financial narrative management. A streamlined report presented in front of investors is more convincing than any explanation.

Not only the trading platforms where Kevin and Richard worked, but almost all of the Web 3.0 industry is undergoing large-scale layoffs, and only a few layoffs have reasonable and satisfactory compensation.

The situations faced by the interviewees mentioned earlier are generally similar; trading platforms cut off contact and access extremely quickly during layoffs: "Everyone's contact information is in there, without these permissions, we don't even have a channel to fight for our rights."

Zhangsheng BeatZ learned from insiders that those in operations and product roles had normal handover time and compensation during layoffs because they worked in offline or overseas offices, "but many tech positions are remote, so they just cut you off quickly, which doesn't impact them much."

Since many IT employees are located within the country while the trading platform is registered abroad. "If you are not there, personal execution costs are high. Those few dollars don't affect lives, so most people don't want to or can't bother to argue."

Even when provided with a few days of buffer time, the situation for employees is not good. When communicating about the resignation procedures, HR requested Kevin to fill in the reason for departure in the system and urged him not to select "company dismissal."

"They would say that if you choose company dismissal, the background check won't pass and will speak poorly of you. So they force you to select 'personal reasons' for leaving." Choosing personal reasons means the company doesn't need to pay any additional compensation.

In the end, Kevin did not receive severance; the company only settled his salary and overtime pay up to his last workday. Later, reflecting on it, Kevin felt that there were indeed some signals before he was laid off that he didn't understand at the time. For example, the working relationship with his direct boss started to become strained, and he could clearly feel that the other person didn't like him as much anymore. But in an organization that operates at high speed every day, these subtle changes are easy to overlook until the moment the shoe drops.

During the period of mass layoffs, major trading platforms have been trying to find ways to make layoffs seem less like layoffs.

For example, Zhangsheng BeatZ has learned from many interviewees that major trading platforms send equipped computers to employees before they start working. These computers have tightly monitored systems installed, which can track employees' keyboard input frequency and mouse click behavior, and this data is included in performance assessments.

It has been reported that a former trading platform employee was fired the next day for watching a series on iQIYI using the company-issued computer.

Another common practice is to set employees nearly impossible KPIs, and after the assessment, dismiss them for "underperformance" or "not meeting company standards." This way, layoffs are packaged as compliant performance eliminations, and the company doesn't have to provide any additional compensation.

A former employee from a trading platform revealed on X that during one layoff period, the trading platform held regular tests on "Web 3.0 industry knowledge" and forced it into KPI assessments, and if employees failed the exam, they also faced direct dismissal risks.

This massive wave of layoffs has struck like a tornado, yet due to the long-term high-pressure monitoring environment, everyone tacitly avoids discussing the elephant in the room.

Beneath the Noise, All is Silent

Compared to those who were abruptly laid off, those who remain may not be any luckier.

Xiaoyu stated that after each round of layoffs, the survivors tend to envy their already departed colleagues because at least their shoes have dropped. The remaining individuals live in constant anxiety, no one knows if they are next. Since the layoffs began, she could clearly feel the work atmosphere turning extremely negative, filled with an unspoken sense of frustration, lacking motivation in everything.

Richard also noted subtle changes in the work atmosphere during the layoff period; although everyone was working under tight schedules and high intensity with rapid product iterations, most of the time they were genuinely busy with real work, product updates, and feature iterations. Now the busyness is entirely different, primarily to meet the management’s fabricated standards. The company has intensified assessment mechanisms, requiring punctual check-ins and increasing the frequency of meetings compared to before.

The "stand-up meeting" culture of trading platforms has been pushed to extremes during layoffs. Originally, stand-up meetings were designed to allow for quick discussions; standing up makes for uncomfortable meetings, encouraging brevity. But according to Richard, at his trading platform, this tool originally intended to boost efficiency has become a drain: two stand-up meetings must be held each day, yet even so, no one knows the direction the product should take.

In six months, three project managers changed, leaving the product management team nearly empty. Many people had ongoing projects, but due to sudden dismissals of key personnel sometimes just minutes before meetings, those works had to come to a halt.

Richard described that there were even outsourced teams within his trading platform, and these outsourced workers were surprisingly paid significantly more than regular employees. It wasn't until Richard later spoke face-to-face with two colleagues that he learned this was due to some executive withholding two years of salary increases from employees.

Richard believes that management does not care about uncontrolled costs, as they are genuinely more concerned about power and control than about technology and products.

Kevin felt the same way. He increasingly felt that the trading platform he was part of resembled a sluggish state-owned enterprise. Given the frequent security incidents in the overall crypto trading platform industry, the technical team had not gained more resources; instead, they became jumpy: seeking no accomplishments but avoiding mistakes.

"Everyone is afraid to take risks now; they just want to ensure their work doesn't go wrong, creating an entirely state-owned enterprise feel," Kevin said.

Before being laid off, John, who grew up abroad, had long lost patience with such a work environment.

From the time he joined, he could clearly feel the company's strong "Chinese culture." Chat records, JIRA tasks, meeting notes, etc., were almost entirely in Chinese; foreign employees felt excluded if their Chinese was poor. The work atmosphere was extremely harsh, the pace fast, and performance evaluations occurred each quarter.

Since everyone was distributed across different time zones, working during non-standard hours was commonplace. John mentioned that his team's stand-up meeting was scheduled for Sunday evenings, "My weekend plans always end early." His QA testing colleagues in the U.S. time zone frequently pinged him messages at eleven o'clock at night.

"We are always on call 24/7," John commented, mentioning that he often saw colleagues submitting code at two o'clock in the morning on Saturdays. "There’s no work-life balance; the rhythm of life here feels more like work, life, and then work again."

Intrigues of the Palace, the Legitimate and the Abandoned

Richard joined during the company’s most prosperous times and witnessed its downfall, among which the most striking was the "power struggle" within the trading platform's management, which was more naked and chaotic than other office politics.

There was a serious trust crisis between the partners in his company due to government investigations and potential litigation issues. One side’s CTO/CFO believed they had been deceived by another partner or lacked the deserved support when facing governmental problems. Ultimately, the partners parted ways and announced a split.

Thus, one side formed a "board of directors" with the core team and a senior employee, establishing a new company to become the actual developer of the old products. Those who were once called friends turned into customer relationships within just a month. By February, the new company had sped up its business by launching two new products per week—this all happened just as Richard was about to resign.

The lower-level employees in this high-level battle had neither the right to know nor to choose. They became casualties of the internal conflicts and turmoil.

In the Web 3.0 industry, many project founders and even trading platform CEOs are merely front-stage figures. This is an open secret within the industry, and almost all practitioners tacitly understand it. The true decision-makers often lurk behind the scenes; the essential quality for front-stage individuals is not innovation or technology, but loyalty.

"Toxic culture spreads from the top down, and those who can survive in this system are typically such characters. If you can move up, you’ll definitely be alienated by this environment. If you are not that type of person, you cannot rise," Kevin analyzed. "The people who are promoted are almost all skilled in intrigue, adept at upward management, and dominant over their subordinates."

Those who are regarded as not part of the inner circle will be systematically cleared by the upper management. First, they will stop inviting them to meetings, key decisions will be made without them; next, they will be reassigned to peripheral roles far from core operations; then, they will no longer need to submit weekly reports, and new tasks will not be assigned. By the time replacements are prepared, they will finally realize they have been sidelined.

"So the entire system is very toxic," Kevin said, "You can check on Glassdoor; everyone generally thinks their colleagues are great, willing to support each other, with good personalities. But the entire system feels like a palace full of intrigue. You mustn't say the wrong thing in front of superiors and must be careful with your rhetoric."

With the Nest Fallen, How Can Any Egg Be Whole?

"I believe the entire Crypto business model has already collapsed," Kevin stated.

In the past, the trading platform's core revenues relied on two things: trading fees and listing incomes. During market booms, new projects flooded in as retail investors rushed to trade, driving up trading and listing fees, leading to team expansions. "But now all listed projects have proven to be here solely to make money and leave afterward."

The issue of listing fees is similarly severe. According to Kevin, trading platforms charge exorbitant fees from project parties, with a small project requiring listing fees of hundreds of thousands of dollars, while its market value after listing might only be several million dollars. "Trading platforms have destroyed the entire ecosystem. On one hand, the cost of startup in the crypto space is too high; on the other hand, retail investors no longer buy in." He views this as a spiraling process: declining project quality, increasing failures, retail exits, shrinking trading volume, reduced fees, and increased forced listing costs.

The rise of on-chain derivative platforms such as Hyperliquid has placed centralized trading platforms in a more passive position. The most profitable derivative trading segment of centralized trading platforms can no longer occur solely within their systems.

Market-level shocks are also accelerating this downward spiral.

Many interviewees mentioned the massive liquidation event on October 10 of last year, which dramatically impacted the industry and deeply affected all practitioners' confidence. All unhedged positions with leverage exceeding two times were forcefully liquidated that day, wiping out retail investors, who have yet to recover.

No one can thrive alone under such circumstances—the difficulties of trading platforms send ripples throughout the entire industry.

John told Zhangsheng BeatZ that many medium-sized Web 3.0 institutions managing between $100 million to $500 million are shutting down; the old financing strategies and DeFi yield methods are becoming increasingly unsustainable. Since last summer, the liquidity in cryptocurrencies has been "severely depleted." Essentially, all altcoins launched in early 2025 tend toward zero, carrying minimal on-paper values. OTC trading volume is bleak, with almost nothing worth doing in market-making aside from RWA-related businesses. A friend of John's working in a market-making firm told him that even though they increased market share and profit per hand through refining strategies, total profits substantially declined, generally shrinking to about 30% of what they were before, and John’s friend was ultimately laid off due to company cost cuts.

Not only market makers and quantitative firms, but Kevin mentioned in an interview that VCs in the current Web 3.0 industry are very cautious in both investment amounts and deal counts, essentially staying out of the market. Even when they invest, the amounts are drastically reduced compared to before. "This cycle has seen VC investments decrease by 80%. No one is investing in crypto anymore. Therefore, when the next bull market arrives, there will be few good projects available for retail investors in terms of listings."

The situation for project teams is equally tough. Kevin’s judgment is: "Except for some projects with Web 2.0 revenues on the B-end, most projects have neither B-end nor C-end revenues."

Crypto is Like a Cockroach Motel

Good birds choose the trees to roost in, but for those laid off from crypto trading platforms, the issue isn't about choosing a tree, but whether any tree is left to choose.

After leaving the trading platform, Kevin joined an AI startup. He is not alone. According to Zhangsheng BeatZ, the vast majority of practitioners leaving the Web 3.0 industry are flocking to the AI sector. This is not hard to understand: AI is currently the hottest track, with active financing and abundant job openings, and there are many similarities in channels and attributes between the crypto and AI industries, both emphasizing growth, user acquisition, and global operations—many skills can be directly migrated.

Richard's disappointment with the Web 3.0 industry is even more thorough. In his view, the trading platform he was at was filled with incompetent people, from partner infighting to grassroots employees slacking off, "Even today, people in the cryptocurrency circle are still a group of self-righteous, arrogant individuals." He later also shifted to the AI industry, completely leaving the crypto world behind.

In contrast, very few have successfully transitioned to traditional industries. A small number of highly skilled trading system and risk control talents have entered traditional market makers and quantitative companies. Some operations, business development, and compliance personnel took advantage of the active Hong Kong and U.S. stock markets to transition into traditional broker systems, but these are the minority. Many others affected by trading platform layoffs end up moving to the next tier of smaller trading platforms.

Because traditional industries' discrimination against the Web 3.0 sector is deeper than many people imagine.

Zhangsheng BeatZ has heard from some traditional financial HR departments that when they see candidates still working at Web 3.0 companies in their resumes, they would directly eliminate them. In the minds of many traditional finance practitioners, the crypto industry is like a giant "roach motel," implying a gray area of regulation, a speculative culture, and unverifiable performance. People coming out of here are naturally regarded as having original sins.

Even within the AI industry, there are similar biases. Some legitimate AI companies working on large models and infrastructure tend to be cautious about candidates with backgrounds in the Web 3.0 industry. In their view, the "growth" of the Web 3.0 industry is more based on speculation and narratives rather than genuine technological barriers. A person who has done operations at a trading platform is viewed very differently from someone who has worked in operations at ByteDance in the eyes of an AI company's HR.

This may be the most profound price that Web 3.0 practitioners who have experienced layoffs are paying.

This Winter is Colder Than Ever

Every industry has its cycles. However, the winter that the Web 3.0 industry is experiencing this time may be different from previous ones.

The competitive landscape in the cryptocurrency sector has fundamentally changed compared to earlier times. Prediction markets like Prediction Market, Polymarket, and Kalshi, along with retail brokerage trading, are all vying for the same pool of retail funds. The money of American retail investors is flowing into AI stocks and prediction markets rather than returning to the crypto market.

Some practitioners even believe that the current situation is worse than the crypto winter of 2022. At least in 2022, retail investors were present; now, the massive liquidation event on October 10 swept away the last of the leveraged retail investors.

To assess whether an industry is young or old, it is not just about its income but also about what it fights for.

Even in such a "shrinking" market, the battles and underhanded tactics between various trading platforms have not ceased. According to Zhangsheng BeatZ from insiders, some trading platform HR departments have even listed "poaching high-salary talent from competitors" as KPI metrics, bringing them in and then laying them off after a few months for various reasons, disrupting competing teams' rhythms, gaining intelligence and customer resources, while those who are poached are merely one-time tools.

This reminds the author of the food delivery wars in the internet industry a few years ago, where the smartest group spent hundreds of billions of profits on mutual exhaustion. The two of China's internet giants, Alibaba, Meituan, and JD, burned over 220 billion yuan (approximately 31 billion U.S. dollars) in just two quarters on food delivery subsidies, nearly equaling the total amount spent on generative AI by all companies globally in a year.

Today's crypto trading platforms are replaying the same script. The industry's pie is shrinking, retail investors are fleeing, trading volume is declining, yet each platform continues to poach from each other, engaging in verbal sparring and intra-industry sabotage.

In the past, we always attributed large-scale layoffs in trading platforms to the cyclical nature of the Web 3.0 industry and the impact of the AI industry. As mentioned at the beginning of this article, more than half of the tech layoffs in 2026 cited AI as a reason, yet nearly 60% of companies admitted that the true cause was actually financial pressure.

The Web 3.0 industry is no exception.

Charging tens of thousands of dollars for listing fees; launching a large number of low-quality tokens that repeatedly cause losses for retail investors upon release; consuming employees' trust and creativity through opaque performance assessments and monitoring systems; failing to contemplate new business models in the winter while instead spending resources on undermining competitors.

If today's Web 3.0 industry winter is not a cyclical fate, then whose fault is the decline of the Web 3.0 industry?